The new owner of the Cape Cod Times, the New Bedford Standard-Times, and other publications and online sites didn’t wait long to start cutting jobs.
Two months after purchasing 33 newspapers and their websites from Rupert Murdoch’s News Corp., the majority investor in GateHouse Media Inc. announced layoffs throughout its recently acquired properties. GateHouse is the region’s largest newspaper owner,
A total of 17 positions were eliminated at the Cape Cod Media Group, which includes the Cape Cod Times. Twelve jobs were cut in the paper’s newsroom, including 10 through abrupt layoffs last Friday.
Eight positions — four full-time and four part-time positions — were cut at SouthCoast Media Group, which includes the Standard-Times and its sister SouthCoastToday.com.
Other layoffs and cutbacks were announced throughout the former Dow Jones Local Media Group, which was sold for $82 million by News Corp. in early September to Newcastle Investment Corp., a unit of New York’s Fortress Investment Group, which is also the majority shareholder in GateHouse, headquartered in Fairport, N.Y. The former Dow Jones papers will eventually be rolled into a new corporate entity, after GateHouse emerges from a prepackaged bankruptcy.
Peter Meyer, president and publisher of the Cape Cod Media Group and SouthCoast Media Group, tried to deflect blame for the cuts from the new owner. He emphasized that the newspaper industry has struggled in recent years, with few avoiding job cuts.
“It is important to know that new ownership is not at fault for today’s actions,” Meyer said in an e-mail last week to employees. “Any buyer would have taken similar measures based on financial realities.”
But cuts were envisioned by the new owner almost from the moment it purchased the Dow Jones holdings.
In a filing just days after the acquisition, Newcastle Investment said it had already identified $10 million in cost reductions at the properties. It even said the newspapers had been “under-managed” by News Corp., with lower-than-average industry digital revenues and “expense reductions of only 6 percent” since 2010.
Meyer declined to comment further. Executives at Newcastle and Fortress could not be reached for comment.
Rick Edmonds, a media business analyst at the Poynter Institute, a journalism education center in St. Petersburg, Fla., said the newspaper industry is indeed going through rough times. But he noted that GateHouse and its backers also have a reputation as a “bottom-line, lean operator” that doesn’t hesitate to make cuts.
“In a case like this, they’ve probably looked at the numbers and said, ‘We can squeeze more [savings] out of this,’ ” he said.
The cuts at the Cape Cod Times, which employs about 250 people, were the focus of discussion at a recent gathering of local business executives, said Wendy Northcross, president of the Cape Cod Chamber of Commerce.
“I guess no one was really shocked, considering the state of newspapers these days,” she said. “The only surprise, I guess, is that the cuts happened faster than people thought they might.”
‘The only surprise is that the cuts happened faster than people thought they might.’
GateHouse Media, which has never made an annual profit as a public company, filed for bankruptcy in September, weighed down by nearly $1.2 billion in debt tied to previous acquisitions. GateHouse owns about 400 newspapers in the United States.
Through its GateHouse and Newcastle holdings, Fortress controls nearly every newspaper south of Boston, including The Patriot Ledger of Quincy, The Enterprise of Brockton, The Herald News of Fall River, and The Taunton Daily Gazette. It also dominates Boston’s western suburbs, where it owns the MetroWest Daily News of Framingham, The Milford Daily News, and several weeklies.Jay Fitzgerald can be reached at firstname.lastname@example.org.