Gannett, the US parent company of UK media stable Newsquest, is subject to a bid from a hedge fund that the National Union of Journailsm (NUJ) has said specialises in "cost-cutting and job slashing". Former Trinity Mirror chief operating officer, Mark Hollinshead told The Drum that the move serves as the "starting pistol" for a new wave of UK media consolidation.
MNG Enterprises, which also goes by Digital First Media, has this week issued a bid for the USA Today and Newsquest-owner at $12 a share. While Gannett's stewardship of established media titles has been widely criticised, especially amid a pattern of substantial exec pay bonuses and staff pay freeze, the Digital First Media acquisition has also sparked strong condemnation.
Digital First Media owns more than 100 US titles including the Denver Post and San Jose Mercury News and is, according to Bloomberg, known for "milking" its assets.
In the UK, Gannett owns 165 titles through its 1999 acquisition of Newsquest, including the Herald titles in Scotland, The Northern Echo, The Argus, The Press, the Oxford Mail and Telegraph & Argus. It also boasts five UK printing presses.
Federica Bedendo, NUJ Newsquest group chapel MoC, said the group is "really concerned" about the news. He said: "Journalists within Newsquest already think this company has hit rock bottom and the prospect of being acquired by an organisation that's renowned for cost-cutting and job slashing isn't going to do anything to benefit our titles or indeed our working conditions. We already operate on a shoe-string, morale is at an all-time low, stress levels are through the roof and we lose more and more talent each day due to the way that Newsquest operates.
"What angers us most is that Newsquest is financially in a very enviable position compared to other publishers, yet its top bosses seem to be prepared to do anything for profit. NUJ members are being driven away from the newspaper industry by these money-chasing operations.”
Chris Morley, Newsquest NUJ national coordinator, also condemned Gannett's management of Newsquest. He said it was a "sorry tale of shameless cost-cutting that has threatened to bring low once mighty titles through the pursuit of unsustainable profits and starvation of investment".
Former Mirror chief operating officer Mark Hollinshead predicted a greater theme of consolidation in UK media, sparked by this latest news.
He said: “Essentially this news is likely to be the starting pistol on the next wave of consolidation in UK press. JP is in a strategic cul de sac and the owners need an exit plan. Newsquest coming together with Johnston Press would create a media business with commercial scale and with the right content model would create a bigger more relevant digital business built out of local content.
"With the likes of Facebook moving into decline and not likely to be here in five years time, in its current form, we could be on the cusp of a renaissance in local media businesses which provide news and journalism which is trusted and useful to consumers albeit published on local growing digital platforms rather than ink on paper. Advertisers are looking for new opportunities which reach large audiences who are consuming content in a relevant and trusted environment”