Chieftain sale raises questions and concerns

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Colorado’s oldest surviving daily newspaper, the 150-year-old Pueblo Chieftain, has been sold to GateHouse Media, the nation’s largest publisher of daily newspapers — a move that, although expected, sent waves of anxiety through the community.

Jane Rawlings, president of the Star-Journal Publishing Corp. and publisher of the Chieftain, announced May 8 that the company had reached an agreement to sell the newspaper to New York-based GateHouse, publisher of more than 680 print and digital products in 38 states.

Rawlings’ father, Robert Hoag Rawlings, served as publisher and editor of the newspaper for decades. Robert Rawlings died in March 2017.

“It was my dad’s wish that The Chieftain would be sold upon his death, with proceeds to be placed in the Rawlings Foundation and that those funds would be used for the betterment of Pueblo and Southern Colorado,” Rawlings said in a news release announcing the sale.

Robert Rawlings was a fierce advocate for Pueblo and fought to protect the Arkansas River. He opposed every effort by upstream communities to take water from the river and battled Colorado Springs over the Southern Delivery System. He donated $4 million to the Robert Hoag Rawlings Public Library, a community landmark, and supported university status for the University of Southern Colorado, now Colorado State University-Pueblo.

It was well known in Pueblo that the Chieftain’s owners had been searching for a buyer, but the announcement of the paper’s sale left many people wondering if the new owners would continue Rawlings’ legacy of superior local news coverage and community involvement.

Jane Rawlings sought to alleviate that concern when she announced the agreement with GateHouse.

The corporation’s executives “demonstrated their clear commitment to producing an outstanding local news report and to leave the opinion side of the newspaper — editorials, endorsements, etc. — under local control,” Rawlings stated.

No final decisions

Jason Taylor, GateHouse Media’s president of Western U.S. Publishing Operations, told the Business Journal that “we expect the leadership will remain very active in the community. … We help them tell stories, help them with technology and advise on how to get stories read and seen by more people. But content is a local decision, as well as involvement in the local community.”

Taylor said GateHouse’s goal “is to minimize any impacts on personnel. At the same time, there are synergies that come from ownership by a much larger company.”

He acknowledged that the majority of GateHouse’s newspapers are edited and designed at the company’s Center for News and Design in Austin, Texas. The center serves as the hub for centralized page design, copy editing, content development and digital publishing for GateHouse newspapers across the country.

Taylor said he anticipated the sale of the Chieftain would close within 30 days. Until then, many decisions about the paper’s future “are still in the air,” he said. “The team was there last week evaluating what the scenario would look like, but no final decisions have been made.”

The Western division team will be involved in helping Chieftain employees learn GateHouse technology and “actively advising them when they need help.”

Chieftain employees will have access to ThriveHive, a GateHouse-owned digital marketing platform, to help the paper and its advertisers grow their audiences in the greater Pueblo area.

“We also look forward to bringing our events strategy into Pueblo to create local events that engage our readers and the community,” Taylor said. “We bring the power of one of the nation’s largest media companies to help modernize the way the paper interacts with the community, and that is an invaluable asset.

“We sincerely see our role as not only trying to save community journalism but to help community journalism grow,” he said.

The sale and the Guild

Newsroom employees at the Chieftain are represented by the Denver Newspaper Guild, Local 37074 of the Communications Workers of America.

“They’re treating it as an asset sale; that is, they’re not buying employees,” said Tony Mulligan, Denver Newspaper Guild administrative officer. “They’ll be interviewing everybody and offering employment to their employees. If you don’t get an offer, you’re laid off by the Rawlings family, not GateHouse.”

If more than 50 percent of the bargaining unit’s employees are hired back, “they have to recognize the union, but they don’t have to honor the existing contract,” Mulligan said. “We would be starting from scratch. They would be establishing pay and working conditions, and we would bargain.”

Mulligan said the Guild would be negotiating with the current owners for the continuation of health insurance, dental coverage and vacations.

“Hopefully they will retain seniority for those who do go on to work for GateHouse,” he said. “I anticipate they will retain the majority of employees.”

The sale of the Chieftain to GateHouse came just weeks after Alden Global Capital, the out-of-state, hedge fund owner of The Denver Post, ordered the paper to cut nearly a third of its remaining journalists. Alden had already reduced the paper’s staff from more than 250 to less than 100.

Mulligan described Alden as a “vulture fund” that “sucks newspapers dry, then leaves.” GateHouse, on the other hand, “seems to be trying to get some longevity out of their purchases.”

Newspaper chains can be good stewards of their publications, honoring their obligations to their communities and providing the information they need.

“But more often we have seen large chains not honor that obligation,” Mulligan said. “We prefer local owners who are immersed in the communities they serve. …  Without that core community newspaper, the ability to provide objective news has been diminished significantly. [They are] no longer watchdogs over city councils and water boards. It’s a danger to our communities, and it’s very concerning. I don’t know what the solution is.”

A complicated story

More than 1,500 locally owned, daily and weekly newspapers have been purchased by outside companies in the past few years. Alden, which bought The Denver Post’s bankrupt parent company in 2010, has acquired more than 90 newspapers across the country and often aggressively cuts costs through measures such as massive layoffs to extract profits.

According to its website, GateHouse Media publishes 144 daily newspapers, 341 community publications and more than 569 local market websites.

This year, the company has acquired several large daily newspapers, including the Akron (Ohio) Beacon Journal, the Austin (Texas) American-Statesman, the Palm Beach (Fla.) Post and Daily News, and the Eugene (Ore.) Register-Guard.

GateHouse has “a somewhat complicated story,” said Rick Edmonds, media business analyst at The Poynter Institute and a former editor of the Tampa Bay Times and Philadelphia Inquirer.

“It’s been around for 10 or 15 years,” Edmonds said. “It was taken into bankruptcy and back out five years ago, and came under the corporate ownership of New Media Investment Group, a public company. They are associated with a very large fund called Fortress Investment Group, which has majority control.”

In the past two or three years, GateHouse’s business strategy has been buying papers and streamlining them to operate more profitably, Edmonds said.

“Typically, their way of operating is to go in and reduce expenses by a lot,” he said. This is accomplished by centralizing ad sales and technical functions, replacing those functions with their own systems; decreasing the size of newsrooms; publishing smaller papers; and moving copy editing, design and layout duties to the Center for News and Design.

“It boils down to a loss of local jobs,” Edmonds said.

An insider’s view

Staff reductions at GateHouse publications have been less extreme than those at Alden’s newspapers.

Taylor said only six employees were not retained at the Eugene Register-Guard. But other GateHouse purchases have resulted in substantial staff cuts.

At the Columbia (Mo.) Daily Tribune, a family-owned newspaper that was sold to GateHouse in October 2016, the staff of 10 reporters was cut in half, and the entire copy editing and graphic arts staff of nine people was let go, former Tribune reporter Jodie Jackson Jr. said.

Jackson, who covered county government, business and health care for nine years, said members of the Waters family, which had operated the Tribune since 1905, were dedicated advocates of the community and involved in a number of civic groups.

After GateHouse’s acquisition, “the newspaper shrank dramatically and went from an afternoon paper to morning delivery,” Jackson said. “That was met with a great hue and cry from subscribers. It was symptomatic of a bigger ill, which was that GateHouse just did not invest in the community.”

Quality also plummeted, Jackson said. The staff noted layout errors after the editing and design functions were shifted to Austin. The loss of veteran journalists who were intimately connected with the community also contributed to a decline in circulation.

“I know what good community journalism is, and it’s not what GateHouse represents,” he said.

Jackson left the Tribune — and journalism — in April 2017. He now works in marketing for a health care consulting company.

Local vs. outside ownership

Whether the Chieftain follows the same path as the Tribune remains to be seen.

“I think we have all been anxious about the fate of the Chieftain,” said Samuel Ebersole, professor of mass communications at CSU-Pueblo. “It has been a great partner with us, an amazing contributor to the community and an important part of all of southern Colorado. We don’t know what the future of all that is.”

While he acknowledges he doesn’t know much about GateHouse, he said his perception is that “their track record has not been positive regarding what they do to papers they purchase. I think it’s better than the situation at The Denver Post, but it can’t be as good as the local ownership we’ve had for decades.”

From a local journalism perspective, “I think it was better to have the Chieftain as family-owned,” said John Rodriguez, publisher of Pueblo’s The PULP, an independent newsmagazine. “I don’t know how selling to GateHouse will make Pueblo news coverage stronger. Maybe it will, but they were a big fish in a very small pond, and now they’re an asset in a large corporation.”

Rodriguez expects GateHouse will “right-size” the Chieftain, but “the larger issue is that if they take 15 percent in profits, that’s money that comes out of the local economy. It means that revenue leaves this area.”

Most Pueblo business leaders expected the sale of the Chieftain to happen, said Jeffrey Shaw, president and CEO of the Pueblo Economic Development Corp.

“The business community has a lot of confidence in the Chieftain and the Rawlings family,” Shaw said. “It’s our belief that they had goals in mind on who they wanted to sell it to, and we respect and trust that. … The Rawlings family has always been supportive of us, and we’ve been supportive of them. I imagine the relationship is going to continue one way or the other.”