Metro

Boston Herald bidder known for cost-cutting

The Boston Herald offices in the Seaport District.
Jonathan Wiggs/Globe Staff
The Boston Herald offices in the Seaport District.

Editor’s note: Mark Arsenault worked for The Providence Journal from 1998-2008.

PROVIDENCE — Cost cutting is a fact of life in the newspaper industry. At GateHouse Media, the country’s largest newspaper chain, it is practiced with a discipline that the company says is essential for survival — but that critics say is suffocating local journalism.

The future of newspapers in Massachusetts may hinge on which view is right. Already the owner of nine Massachusetts dailies from Worcester to Quincy to Cape Cod — and more than 100 weekly papers and shoppers — GateHouse has its sights on Boston.

The company is one of two bidders seeking to acquire the Boston Herald, the feisty tabloid that declared bankruptcy in December. GateHouse declined to discuss its plans for the Herald, saying it must first beat out Revolution Capital Group, a Tampa investment firm, and any other would-be buyers that may jump into an auction for the paper scheduled for next month.

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But GateHouse’s playbook is no secret: It scoops up papers whose owners want out of the shrinking business, cuts jobs, centralizes operations wherever possible, and keeps tight control over expenses. While most of its publications are small, a look at how The Providence Journal, Rhode Island’s primary newspaper, has fared under GateHouse ownership for the past three years offers some insight into what could be in store for the Herald.

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“They haven’t cut pay — what they have cut is bodies,” said one experienced Providence Journal news staffer, who likened the massive GateHouse chain to the Borg from “Star Trek,” a feared alien race that forcibly assimilates all in its path.

Fewer journalists means “we get our ass beat all the time” on stories, the staffer said, which is not something longtime Journal readers are used to seeing from a newspaper with a long history of providing smart coverage and narrative storytelling.

GateHouse’s prominence and bottom-line approach have attracted legions of critics. In a blistering article in late December, the American Prospect, a small magazine known for its progressive views, took aim at GateHouse and other newspaper chains linked to investment firms, saying they sorely lack the civic loyalties that have infused newspapers for generations.

“The malign genius of the private equity business model . . . is that it allows the absentee owner to drive a paper into the ground, but extract exorbitant profits along the way from management fees, dividends, and tax breaks,” the authors wrote.

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On the flip side, GateHouse has not abandoned newspapers, and it is possible some smaller papers may not have survived without the power of the chain behind them.

“If you have a single paper or a small chain, you have to do everything yourself and pay for it,” said Dan Kennedy, a media critic and Northeastern University journalism professor. A large chain such as GateHouse can spread out costs, do some things more efficiently, and potentially keep some small papers viable, he said.

“It very may well be that some communities wouldn’t have a paper at all without GateHouse,” Kennedy said. On the other hand, he added, some communities could be better off in the long run if ailing newspapers are replaced by more robust online news sources.

GateHouse is known for running its papers “pretty lean,” said Rick Edmonds, media business analyst at the Poynter Institute. “They’re trying to get savings and economies of scale and make a big enough profit so they can pay a pretty generous dividend to their shareholders,” he said.

The company has said it would cut employees at the Herald from about 240 to 175. At its peak around 2000, the Herald employed 900 people, the paper has reported. It has shrunk — as have the Globe and legions of newspapers across the country — under the twin pressures of falling print readership and advertising revenue.

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Bill Church, senior vice president for news at GateHouse, attributed staffing cuts at GateHouse papers to the industry’s deep financial troubles.

“Can you name me five newspapers that have grown the past five years?” he said in an interview.

He spoke at length about how resolute GateHouse’s journalists are about doing work that matters, and he bristled at criticism that GateHouse papers are “cookie cutter” products from owners who don’t care what’s in them.

“As an editor, that pisses me off,” he said.

“Nobody is looking for warm hugs, but the reality is there’s a lot of pride that goes into our newsrooms and the products we provide,” Church added. “I can’t articulate enough how important the journalism is.”

He later e-mailed a lengthy list of journalism awards won by GateHouse newspapers in 2017.

In Boston, readers have long benefited from competition between the Globe and Herald, especially on breaking news stories. Even with the planned cuts, the Herald should retain a large enough news staff to offer credible competition for the Globe, said Northeastern’s Kennedy.

But fewer people likely would mean weaker competition.

The sale of the Herald could affect the Globe financially, as well, because the Globe is paid to print the Herald at the Globe’s Taunton printing plant. A company such as GateHouse, which owns printing presses in New England, could conceivably print the paper itself.

Beyond shrinking the staff, it is hard to gauge GateHouse’s plans for the Herald, which is not a typical GateHouse property.

“It doesn’t seem to fit their model,” Kennedy said. “The idea of buying a distant number two paper in a big city doesn’t match up with what they’ve done.” GateHouse is more widely known for buying dominant papers in smaller markets, he said.

The Providence Journal is larger than many GateHouse properties, but has long been the dominant paper in Rhode Island.

The Journal has been under GateHouse since 2014, when Dallas-based A.H. Belo Corp. sold it to GateHouse’s parent company for $46 million.

It was a prize acquisition for GateHouse. Not only does the Journal — printed since 1829 — claim the title as the country’s oldest continuously published daily newspaper, it had a reputation as a watchdog in a small state known for generating more than its share of political corruption and quirky news stories.

Brian C. Jones, a former Journal reporter who worked at the paper from 1966 to 2001, said the Journal in its ’80s and ’90s heyday would not hesitate to fly its reporters around the world chasing stories, while also maintaining bureaus all over the state “that covered the [expletive] out of everything.”

“We were in a golden age of journalism without realizing it,” Jones said. “We were part of something extraordinary. If you look back on it now, it doesn’t seem possible.”

With the economics of the newspaper business in decline, Belo oversaw job cuts at the Journal long before GateHouse. Shortly before GateHouse took over in 2014, the Journal had about 160 employees in news and advertising represented by the Providence Newspaper Guild, down from about 500 in the 1980s.

GateHouse has shrunk the staff further, and today the Guild represents fewer than 100 Journal employees.

In October, Rhode Island Governor Gina Raimondo kicked up a hornet’s nest when she complained at a forum that Rhode Island’s TV and print media was in such a state of decline that “it’s almost impossible to get the news out.” She singled out the Journal as “a shadow of its former self.”

Raimondo quickly apologized and praised the state’s press corps for its professionalism and dedication. But the point beneath the disparaging language — that smaller papers cannot cover everything they used to — could be said about almost any regional paper in the country.

“Everyone knows that it is not the paper it was,” said C. Eugene Emery, 65, a Journal reporter from 1975 to 2015. “Part of this is just the newspaper business and no fault of GateHouse. But GateHouse clearly doesn’t have a magic formula that can turn things around.”

A number of longtime readers said the Journal still has excellent reporters, if fewer of them, and when the paper focuses on a topic it still has significant influence.

Neil D. Steinberg, president and CEO of the Rhode Island Foundation, said he still sees “The Providence Journal as a leader in providing news and analysis and shining a light on important subjects.”

The Journal in 2017, for instance, published a series of investigative articles on problems at the state Department of Children, Youth, and Families that led to changes by the agency. Informed by the paper’s coverage, the Rhode Island Foundation last week said it is providing a grant toward a program designed to expand foster care in Rhode Island.

Providence Journal executive editor Alan Rosenberg, a 40-year employee, was promoted to the paper’s top news job last May.

One of the obvious changes under GateHouse, he said, is that page design operations were relocated to Texas. The designer who lays out the text, the headlines, and the photos to create Page One participates in story meetings by speakerphone from Austin.

Though he wishes he had a larger staff, “we still have the biggest newsroom in this neck of the woods,” said Rosenberg, 60. “We have to zero in on what our readers care about.”

He said the Journal now resists doing incremental stories on the ordinary workings of government. It is a similar change in focus, Rosenberg noted, to what Globe editor Brian McGrory has outlined for his staff.

GateHouse executives do not meddle in news coverage, Rosenberg said, and he believes top officers of the paper are now more accessible to readers. GateHouse does offer some content and ready-made pages produced by journalists elsewhere in the chain, but leaves it to local editors to decide if they will use them.

The Journal cooperates with GateHouse papers in Massachusetts in covering Boston’s professional sports teams, an effort that would seem natural for Herald beat reporters to expand.

“We make a mistake when we live in the past as journalists,” Rosenberg said. “There’s no sense crying about it. I’m focused on what we’re doing now.”

Mark Arsenault can be reached at mark.arsenault@globe.com. Follow him on Twitter @bostonglobemark.