Schumer (D-N.Y.) wrote that the hedge fund, Alden Global Capital, had been “unwilling to publicly provide relevant details regarding the proposed acquisition,” raising concerns about how it would operate the papers, particularly given the fund’s record of aggressively cutting newsroom jobs to boost profits.
Schumer also raised concerns about how the proposed purchase would avoid antitrust violations and how communities that rely on Gannett papers for news would remain informed if those papers faced steep cuts.
“Because our democracy depends on continued support for the First Amendment, fuller disclosure regarding how the acquisition of Gannett would impact the viability of a free press is in the public interest,” the senator wrote.
Schumer’s letter to Alden’s president, Heath Freeman, comes as Digital First Media, the newspaper company controlled by the hedge fund, continues to pursue a takeover of Gannett, which owns more than 100 daily newspapers, including USA Today and hundreds of weekly papers.
Among Gannett’s titles are at least half a dozen in New York, including the Star-Gazette in Elmira, the Ithaca Journal, the Poughkeepsie Journal, and the Democrat and Chronicle in Rochester.
After The Washington Post published an article on Feb. 11 outlining Digital First’s efforts to strip newspapers of real estate assets, Schumer wondered aloud on the Senate floor what would become of those papers if Alden acquired them.
“The Gannett consortium was already the result of a consolidated news business, one reporter working multiple beats and placing stories in multiple newspapers — I’ve seen that in Upstate New York,” Schumer said.
Digital First, also known as MNG Enterprises, is one of Gannett’s largest shareholders, with 7.5 percent of its stock. In the company’s $1.36 billion bid to purchase Gannett, R. Joseph Fuchs, chairman of the Digital First board, said in a letter to the Gannett board that “We Save Newspapers” by often purchasing them out of bankruptcy or financial distress and putting them on stable financial footing.
Digital First argues that Gannett’s strategy for digital revenue growth has been a failure and that it ought to stop any new investments in online journalism.
In a statement to The Post, an MNG spokeswoman said: “MNG has a long track record of operating newspapers profitably and sustainably to serve their communities. We look forward to providing Senator Schumer with additional information.”
Gannett is trying to fend off the purchase, arguing that Digital First does not have the financial wherewithal to complete the deal. At the same time, its financial losses are mounting as print circulation continues to drop. Sales in the fourth quarter last year fell 12 percent compared with the same period in 2017.
On a call with investors Wednesday, Bob Dickey, Gannett’s president and chief executive, said: “After careful review and consideration conducted in consultation with financial and legal advisers, the Gannett board concluded that MNG’s unsolicited proposal undervalued Gannett, is not in the best interest of the company and our shareholders and is not creditable.”
MNG issued a statement in response, saying Gannett’s “disappointing year-end earnings and guidance underscore MNG’s concerns about the health and direction of the business.”
Schumer is not the only member of Congress to raise concerns about Alden and Digital First’s interest in Gannett. After Digital First announced its bid, Rep. Bill Pascrell Jr. (D-N.J.) issued a statement saying that “the last thing we need is the decimation of more quality media outlets.”
Gannett owns at least eight titles in the Garden State, including the Record in Bergen County, and the Courier-Post of Cherry Hill.
“Across America, newspapers have been shuttered or swallowed whole, slowly starving our communities of information about their towns and neighbors. This problem is especially acute in my state New Jersey,” Pascrell said in the statement.