Rochester Beacon (https://rochesterbeacon.com/2023/01/05/at-the-dc-the-numbers-tell-the-story/)
In early November, a small band of Democrat and Chronicle reporters staged a one-day walkout. The limited strike was one of 14 undertaken by members of NewsGuild-CWA bargaining units at Gannett Co. Inc. papers in this state and others.
A subset of the AFL-CIO-affiliated Communications Workers of America, the Guild represents unionized reporters and photojournalists at 46 U.S. dailies.
The D&C’s union reporters in part were airing wage-and-benefit beefs that strikers typically organize around. But their main complaints focused on a steady stream of cutbacks that over more than a decade have seen newsroom staffs at the D&C and other Gannett papers reduced to virtual skeleton crews.
The media chain’s staff cutbacks have come against a backdrop of financial losses and stunning drops in readership that would seem to make any accommodation acceptable to both the Guild and management only dimly possible.
The coordinated walkouts at the D&C and Gannett papers in New York, New Jersey and Arizona came more than three years after Guild journalists’ last contract with Gannett expired in the first quarter of 2019.
They also came a month after Gannett, the largest owner of U.S. newspapers with a portfolio of nearly 500 American print dailies and weeklies, instituted the latest in a long series of money-saving measures.
In addition to suspension of the company’s contributions to employees’ 401(k) accounts, those measures included the imposition of five days of unpaid leave during the 2022 yearend holidays, a layoff of 400 workers in August, a decision to eliminate another 400 open positions, and institution of a hiring freeze.
A second round of staff cuts followed the Guild walkouts.
Gannett officials did not respond to an emailed Rochester Beacon request for comment on the walkout and the Rochester daily’s future prospects.
A D&C story reporting on the November walkout quoted Gannett corporate spokesperson Lark-Marie Anton as saying that Gannett’s goal is “to preserve journalism and serve our communities across the country.”
“Despite the work stoppage,” Anton said, “in some of our markets, we will not cease delivering trusted news to our loyal readers.”
The D&C article also quoted Gannett chairman and CEO Mike Reed promising that the company would “continue to respond decisively to the ongoing macroeconomic volatility and inflationary pressures.”
D&C education reporter Justin Murphy is not sure how well Reed’s resolve meshes with Anton’s goal.
A 10-year veteran of the Rochester daily, Murphy co-chairs the D&C’s Guild unit. Wage-and-benefit concerns do not seem to top of his list of concerns. He worries more about his and his colleagues’ decreasing ability to adequately cover local events.
Asked to say what spurred the labor action, Murphy speaks first of how the paper’s decades-long efforts to trim payroll have reduced its reportorial staff to a fraction of its once-commanding presence. When prompted to comment on the company’s decision to suspend 401(k) contributions, Murphy says he heard something to that effect but is fuzzy on the details.
When he started at the D&C, Murphy muses, “it was a golden age.” The paper’s newsroom staff was then 86 strong. Now the count is 20. Unless the current trend reverses, it seems likely to fall further.
Murphy concedes that his perception of his early years at the paper as a golden age is relative. A decade before he started, he says, the D&C’s newsroom staff stood in the neighborhood of 150.
An industry in crisis
The D&C is hardly unique.
From 2008 to 2018, the number of newsroom employees at U.S. newspapers fell from just over 70,000 to less than 40,000, according to a 2019 Brookings Institution study, “Local Journalism in Crisis.”
Overall newsroom employment including staffs at outlets like local TV stations fell 25 percent during the period, the study notes. The drop for newspapers at 47 percent was almost double.
Paralleling the decline in reportorial staff are precipitous drops in local newspapers’ circulation and advertising revenues, the report states, a trend from which Gannett has not been excused.
In recent years, Gannett’s financial performance has suffered. In the face of a stubbornly negative bottom line, staff reductions have been and remain a primary tool employed by Gannett and other strapped dailies around the country to stay afloat.
Gannett does not report the financial performance of individual papers like the D&C. But the Rochester daily’s circulation trends make a case for seeing the D&C as microcosmic reflection of the company’s overall financial pickle.
For 2021, Gannett reported a $136.2 million net loss on revenues of $3.2 billion, compared to a $672.4 million net loss on revenues of $3.4 billion the previous year. Red ink continued to flow in 2022. For the first nine months of the year, Gannett reported a $110.9 million net loss on revenues of $2.2 billion. In the same period a year earlier, the company posted a $113.4 million net loss on revenues of nearly $2.4 billion.
Publishing, a revenue category that includes dollars generated by print publications including the D&C, accounted for the largest portion—$2.9 billion—of Gannett’s 2021 revenues. The segment was down 6 percent from $3.1 billion in 2020.
Gannett’s strategy to counter declining print readership is convincing readers to go online to read its digital offerings. The D&C puts out two. One is in a straight digital format. The other is a digital replica of the print edition.
“Our strategy is focused on driving audience growth and engagement by delivering deeper content experiences to our consumers, while offering the products and marketing expertise our advertisers desire. We look to optimize our print operations to efficiently manage for this declining print audience,” the firm’s 2021 annual report states.
However encouraged Gannett’s management might be by readers’ shift to digital, the D&C’s circulation numbers show the Rochester daily has been shedding readers in all formats at an alarming rate.
For ad-revenue dependent, for-profit newspapers like the D&C, the migration of once-dependable revenue streams like classified ads to online venues like Craig’s List has been a blow. The confluence of declining ad revenue and drops in readership packs a double whammy as lower circulation numbers translate to lower rates publications can charge for ad space.
In 2021, Gannett’s print advertising revenues of $792.3 million were down 12 percent from $901.8 million the year before. Digital ad revenues of $858.9 million were up over the previous year’s $808.4 million total—a 6 percent increase, well short of the amount needed to offset the decline in print advertising. Total circulation, which combines digital and print subscription revenues, fell 10 percent from $1.4 billion to $1.2 billion.
The D&C’s readership losses, meanwhile, have come as more of a torrent than a drip.
Gannett’s 2021 year-end report states the D&C’s daily circulation at 43,101 and Sunday circulation at 73,569. Print subscribers have access to digital editions. Gannett does not state how many digital-only subscribers the D&C has, but the paper says digital subscriptions now exceed 25,000.
Unaudited figures Gannett supplied last year to the Alliance for Audited Media, an Illinois nonprofit that tracks U.S. publications’ circulation, showed the Rochester daily’s average Monday-Friday circulation through last September was 27,569. Sunday circulation averaged 42,355.
That is a 36 percent decline in Monday-Friday circulation (compared with year-end daily circulation) and a 42 percent drop in Sunday circulation for the first nine months of last year from the 2021 full-year circulation numbers Gannett posted in its annual report.
Compared with earlier years, the declines are even more dramatic.
Audited AAM figures for 2014, the earliest year immediately available, show the D&C’s Monday-Friday circulation then averaged 92,443, Saturday circulation was 111,025 and Sunday circulation averaged 127,783.
That means over the last eight years, the D&C’s Monday-Friday circulation dropped 70 percent; Sunday circulation saw a 67 percent decline.
According to a 2006 Rochester Business Journal article, the D&C then boasted Monday-Friday circulation of 160,290, Saturday circulation of 174,613 and Sunday circulation of 219,660.
For D&C-parent Gannett, 2021 digital ad sales grew but at a slower rate than its print advertising revenue declined, while total readership fell—trends that suggest the company faces a more immediate challenge than converting print readers to digital.
“Newspapers (in the U.S.) have been unable to make up for the loss of revenue from traditional print advertising as readers consume news on their computers, smart phones, and tablets,” the Brookings Institution study notes. “While U.S. newspapers have seen growth in digital advertising revenue, newspapers have experienced a sharp decline in total advertising revenue. Digital advertising revenue, in other words, makes up a growing share of a shrinking pie.”
No shortage of potential readers
The precipitous declines in D&C readership came as the region’s pool of potential readers remained relatively stable. In 2006, the U.S. Census reported Monroe County’s population at 738,329. In 2014, the count was 747,503. It currently stands at 762,463. The D&C’s decline has not come for want of potential readers.
As the Brookings Institution study notes, shifts in readers’ preferences to online options like news aggregators or posts that appear on social media certainly explain some of print journalism’s woes. But could at least some of the D&C’s stunning readership losses have to do with the product itself?
Rochester residents Adrian Martin, 38, and his wife, Ruth Schneider, 37, are a longtime D&C subscribers. Martin is a data analyst with the Rochester Police Department; Schneider, a neurologist, is a UR Medicine physician. They are parents of three children. While they plan on keeping their D&C subscription, Martin says, they are not great fans of the Rochester daily.
He says they keep their D&C print subscription because it is the only major daily in town and because it helps encourage their two older boys, aged 6 and 9, to read. But asked what he thinks of the D&C’s local coverage, his two-word answer is succinct: “It’s terrible.”
Coverage of local news and events, in Martin’s view, is slipshod. The paper’s front and local news sections too often consist mostly of pieces reprinted from other Gannett dailies around the state, wire-service stories and articles from Gannett’s national flagship daily, USA Today.
The D&C’s coverage of national news is okay, Martin says, but the paper almost never goes to the trouble of inserting local tie-ins where such inserts would apply. Important local stories, meanwhile, are too often given short shrift or ignored.
“I know that’s true,” says Martin, “because of what I see in my work for the police department.”
If he doesn’t see the bylines of a few veteran reporters—he names Murphy, Gary Craig and Sean Lehman as examples—whose work he has come to admire and trust, Martin says, “I skip right to the comics.”
When the D&C does cover local stories in depth, it often puts them first online. But while the digital format’s immediacy might make that seem like a prudent move, Martin finds the D&C’s website unappealing and hard to use.
The D&C online “is more like a high school sports blog than a newspaper,” he says. Articles are apparently posted when they are filed with little or no thought to their relative importance. ”You see a bunch of high school sports stories and then five stories down there’s a murder.” When stories finally appear in the better-organized print edition, “it’s five days later.”
“I don’t think the reporters and editors here are really to blame,” Martin theorizes. “I think it’s Gannett.”
Gannett’s latest chapter
Present-day Gannett is the result of a 2019 merger between Gannett Co. Inc. and GateHouse Media. The companies, at the time respectively the largest and second-largest U.S. newspaper owners, together are by far the country’s biggest newspaper publisher.
As the controlling partner in the merger, GateHouse assumed the Gannett name and moved its headquarters from Perinton to Gannett’s McLean, Va., home base.
Compiled as the merger was taking place, the 2019 Brookings Institution report correctly predicted that since “both GateHouse and Gannett have a history of cutting newsroom staff, the merger will likely entail another round of layoffs for local newspapers across the country as top executives aim to save $300 million annually.”
Gannett’s roots trace to 1906, when founder Frank Gannett began his publishing career in Elmira as half owner of the Elmira Star Gazette. He later bought what became the now-defunct Rochester Times-Union and the D&C, making the D&C the flagship of what was, by the time of his death in 1957, a 22-newspaper chain based in Rochester.
In 1982, Gannett’s then CEO, Al Neuharth, founded USA Today and moved Gannett’s headquarters to Virginia, where he based the fledgling national newspaper. USA Today was initially staffed with reporters and editors culled from Gannett’s regional papers including Rochester’s Times-Union and D&C.
In a precursor to the financial strains now faced by Gannett’s regional papers, USA Today’s staffing costs were initially charged to the budgets of the hometown papers where the reporters and editors had formerly worked. Such costs included temporarily lodgings for reporters and editors pulled from regional papers in rent-free smaller and larger Washington, D.C., apartments. In a derisive reference to a feminine hygiene brand, such units were dubbed by their occupants stay-free mini pads and stay-free maxi pads.
GateHouse was established by the New York City-based private equity firm Fortress Investment Group, which in 2005 purchased the Illinois-based Liberty Group Publishing’s newspapers. With its 2006 acquisition of the Rochester-area Messenger Post Newspapers, GateHouse moved its headquarters to Perinton.
By 2013, GateHouse had acquired 330 regional daily and weekly papers. Overburdened with debt, it filed a Chapter 11 bankruptcy that year. It emerged a few months later restructured under the umbrella of a Fortress private equity unit, New Media Investment Group.
Flush with a new infusion of private-equity cash, GateHouse/New Media embarked on a newspaper buying spree. Local purchases included the Rochester Business Journal. It also acquired BridgeTower Media, an owner of legal dailies including Rochester’s Daily Record.
In addition to papers in other U.S. markets, GateHouse acquired a United Kingdom group of papers, and eventually, its biggest purchase, Gannett. Roughly a year after the GateHouse-Gannett merger, BridgeTower Media was sold to private equity firm Transom Capital Group. BridgeTower Media continues to operate RBJ and the Daily Record.
Private equity investors like Fortress typically buy companies—generally distressed, undervalued firms—and operate them for a time before trying to sell them for more than they paid.
In deals known as leveraged buyouts, private equity businesses usually borrow money to make acquisitions and load the debt on the acquired company. If the investors are able to turn the acquired company around, the firm repays or restructures the debt, investors sell at a profit and all goes well.
If a turnaround doesn’t go as planned and the acquired firm goes under, private equity investors, who often have collected generous management fees, can leave the acquired company and its lenders holding the bag,
GateHouse/NewMedia paid $1.4 billion for Gannett. At the acquisition, it arranged for the merged firm to borrow $1.8 billion at 11.5 percent interest. With interest rates at historic lows in 2021, it refinanced $1 billion of the remaining debt in a deal the company said would save it $90 million in interest payments in 2021. The new note comes due in 2026.
When the merger was completed in 2019, Gannett stock (GCI:NYSE) traded at $6.70 a share. On Dec. 30, it closed at $2.03—a drop of 70 percent.
At the merger’s close, Gannett’s then operating CEO Paul Bascobert told the financial publication MarketWatch that in making the announced $300 million in staff cuts, frontline reporters were “the last place we want to touch.”
Some six months later, Bascobert, a digital media expert who had been hired in 2019 as a condition of the merger, was gone.
The Poynter Institute reported at the time that Reed announced Bascobert’s exit in a letter to employees.
Reed said he was eliminating the operating CEO position and adding Bascobert’s duties to his own as NewMedia/Gannett CEO in a move that would “streamline” reporting to the board of directors and save money.
Lost experience
For Murphy, the pace at which the D&C has shed experienced reporters is dispiriting. He says staff shrinkage has made his job much harder.
Over a decade with the D&C, Murphy has done a laudable job of covering his beat, providing granular and often insightful coverage of the Rochester City School District. Last year, he published a book, “Your Children Are Very Greatly in Danger,” chronicling the history of the Rochester City School District. Murphy describes the years he spent researching and writing the book on his own time as “my private labor.”
Cornell University Press describes the book as “drawing on never-before-seen archival documents as well as scores of new interviews (to show) how discriminatory public policy and personal prejudice combined to create the racially segregated education system that exists in the Rochester area today.”
Murphy says the departure of more of the D&C’s most experienced reporters has severely cut into the paper’s ability to cover local beats including his own.
“When I started, I just covered the RCSD,” he explains. “Then, I also had to cover suburban districts. Then after (higher education beat reporter) Jim Goodman left, I’m covering the area’s largest employer (the University of Rochester).”
Murphy says departures of seasoned reporters like investigative journalist Steve Orr, City Hall reporter Brian Sharp and health care reporter Patti Singer have left voids that at best have been only partially filled and sometimes not filled at all.
The D&C has hired some younger replacements and some are talented, Murphy says. Among them are journalists from Report for America, a nonprofit that describes its mission as helping to place “emerging journalists” with established papers.
In a boon to Gannett’s bottom line, Report for America covers half such journalists’ salaries. Donations cover another 25 percent, providing papers like the D&C with reporters for a quarter of the expense they would otherwise incur.
Murphy is not convinced that with the D&C’s ever-thinning reportorial ranks such aspiring young journalists can get the best experience to season their budding talents. Learning how to tease important stories out of mind-numbing hours spent attending school board and legislative committee meetings, for example.
While young reporters have traditionally cut their teeth on such assignments and through them developed important sources, at the D&C, laments Murphy, “there’s no such thing as covering a board meeting anymore.”
Money-saving moves like centralizing copy editing and graphics functions at out-of-town locations have made it significantly harder for remaining staff to turn out a good product, Murphy says.
“It used to be if I wanted a graphic for a story, I could get one easily,” he says. Now, it is harder and sometimes impossible.
In an early November print edition, the D&C put a story on upcoming elections on its front page. The article, a reprint from a downstate Gannett daily, listed Westchester County polling places but failed to include any Rochester-area information. The oversight was eventually corrected in the D&C’s digital edition.
Asked what possible fix there might be for what he sees as the D&C’s ills, Murphy has a surprisingly quick answer: “local ownership.”
The comment was flip, he concludes after some thought. But still, Murphy concedes, it probably represents the Rochester paper’s best chance of reversing its slide. So far, no white knight seems to be on the horizon.
But the cuts continue.
On Tuesday, the D&C reported that its printing plant at Canal Ponds Business Park in Greece, which opened in 1997, will be shuttered in April—eliminating 57 full-time and 51 part-time jobs and moving publication of the D&C and other newspapers out of state.
Will Astor is Rochester Beacon senior writer. The Beacon welcomes comments from readers who adhere to our comment policy including use of their full, real name.
This is truly a sad state of affairs. There are plenty of places to point fingers, but the bottom line is that the print newspaper business model cannot currently compete with the speed and depth of available content online. It certainly didn’t help over the years that the D&C/Gannett never really solved for a community-friendly and market-competitive paywall strategy. But that would probably have only delayed the inevitable. It is simply too easy and convenient to learn about breaking news stories in real time through social media and alternative news outlets. Want to know who won the Amerks game (and see video of the winning goal)? Just jump on the Amerks’ Twitter feed. Want to find out what happened at the school board meeting? Check out the Facebook group with the recorded replay and all the opinionated comments from parents and taxpayers.
Unfortunately, what this all means is that the professionalism is being removed from the news business. The quality journalism necessary to keep the public informed of the really big and important stuff is having a harder time remaining financially viable, and the Republic is suffering for it. We live in an era where there is more visibility, transparency and access to information than ever before… but without a trusted and unbiased news industry to parse out, dive deeper into, and elevate the most important stories, this information overload serves only to leave us LESS informed and LESS trusting of the establishment “truths”.
The solution? Probably a realization that professional journalism (at least at the local level) will need to be supported financially much the same way as the arts. But to generate that support the quality and breadth of coverage needs to improve substantially, and that is a bit of a Catch-22. Perhaps even this will need to drill down to the reporter level, where truly talented journalists can earn a living from the direct support of a grateful community. This model, of course, already exists in the form of full-time bloggers, Patreon-funded creators, etc. But can it truly be translated to hard-hitting, in-depth local news coverage that requires more than pithy opinionating or rehashed reporting of other available information? Is the reporting that requires weeks of preparation to publish one vitally important piece viable? I certainly hope so, but I’m not yet sure the go-forward business model that will allow it to be so.
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