Stephen Lemons Column

(UPDATE) Commentary: In the Battle Between Gannett and Digital First, Root for Neither

The Republic building in 2013.
The Republic building in 2013. Zeb Micelli, CC 1.0

click to enlarge The Republic building in 2013. - ZEB MICELLI, CC 1.0
The Republic building in 2013.
Zeb Micelli, CC 1.0
Update, Thursday, May 16, 11 a.m.: Gannett Co. appeared to win its battle with Digital First Media today as the shareholders re-elected the Gannett's entire slate of candidates for seats on the board of directors.

Our original story begins here:

Would you rather be eaten alive by wild boars, or dismembered slowly, with appendages being sliced off year by year until your disembodied noggin is left to rot in the desert sun?

Between those two fates, you'd have to choose the latter, which is why anyone who cares about Arizona journalism grudgingly favors Gannett to emerge triumphant on Thursday, May 16, when shareholders decide on a $1.36 billion takeover bid by Digital First Media (also known as MNG), a newspaper publishing company owned by the hedge fund Alden Global Capital.

Gannett owns the Arizona Republic and shares ownership with Iowa-based Lee Enterprises of the Arizona Daily Star in Tucson. With its headquarters in McLean, Virginia, Gannett publishes USA Today along with more than 100 daily papers, making it the biggest newspaper publisher in the nation in terms of circulation.

Digital First's practice of taking over newspapers only to gut them within an inch of gulping their last breath has garnered it the reputation of being the Night King of journalism, with its zombified properties fighting on like Game of Thrones' army of the dead.

Yet, Gannett is known as only being slightly better and less incompetent than the bottom-feeders at Digital First, who have offered shareholders $12 a share for stock valued at $8.74 per share as of close on Monday, May 13.

That's a 30-plus percent markup, which normally might be appealing to the punters who have invested in an industry that's been dying a gradual death ever since the 1990s. But the good news for Gannett, and the employees who've survived its perennial cuts, is that two proxy advisory firms, which advise shareholders on such sales, have weighed in against Digital First.

Bye-Bye Benson

However, Gannett ain't no warm and fuzzy corporate behemoth. Its bean-counter mentality has endeared it to no one over the years as it consistently has taken steps that are at best counterproductive and at worst self-destructive.

For example, Gannett slashed newsroom jobs across the country in January in the wake of Digital First's bid for ownership. Hundreds lost their jobs nationwide. Locally, only a couple of staffers caught a pink slip, but one of them was beloved Pulitzer Prize-winning editorial cartoonist Steve Benson, who has been flaying politicians alive as far back as the bad old days of Governor Ev Mecham.

Talk about an asinine decision. With the Republic's readership in the crapper, the honchos decided to remove one of the few reasons anyone actually might want to subscribe to their rag — whether in print or the online

Around the same time, the Republic announced that it had hired desiccated racist goober Jan Brewer as a columnist, though the woman has the IQ of a lampshade and the personality of a wall socket.

This is the side we're supposed to be rooting for? And yet, it must be acknowledged that the Republic employs a number of journalists who do good work despite the corporate fascist dunderheads they serve. Arguably, Gannett's Borg-like number-crunchers are slightly better than the business buzzards at Digital First, and a slower death is usually preferable if still unwelcome.

Moreover, the vaunted Fourth Estate seems more and more like a decrepit trailer park that will eventually be razed to build condos for the upwardly mobile.

In March, Business Insider reported that in 2019 alone the industry eliminated more than 2,400 positions from new media outlets such as Buzzfeed and Vice as well as "legacy" media like Cleveland's The Plain Dealer and newspaper conglomerate McClatchy.

Earlier this month, The Times-Picayune of New Orleans was purchased by a competitor, laying off its entire staff of 161 employees, including 65 reporters and editors. And last week, The Salt Lake Tribune, Utah's largest paper, announced that it could no longer hack it as a money-making venture and would seek federal approval to become a nonprofit.

This Sort of Thing Has a Name

I recently spoke to Mathias Arrfelt, a professor at Arizona State University's W.P. Carey School of Business, about the newspaper apocalypse. He basically told me that they have a name for this sort of thing: It's called capitalism, stupid.

Combine the ruthless efficiency of the internet with the profit motive and the unwillingness of Americans to pay for the news they consume, and the result is predictable.

"To me, it’s just going to be less journalists," Arrfelt said of the industry's future. "If you keep merging newspapers, merging newsrooms, then eventually there’s going to be less journalists at some point. Unless people start to be willing to pay for this again."

Gannett and other players adhere to a shareholder model of corporate governance, Arrfelt reminded me. Which means they either maximize profits or get gobbled up.

"I’m not necessarily saying that perspective is right," the professor said. "But if you think about it from that perspective, every firm that is not maximizing performance would be a takeover target."

Arrfelt pointed out that "uber newspapers" like The New York Times have been having some success at boosting digital subscriptions, erecting paywalls, and making readers pay for content that they used to get for free.

Smaller media outlets, not so much.

A recent analysis of the news industry published by The Wall Street Journal bears this out. From 2004 to 2018, almost 1,800 newspapers closed their doors, the article explained, "leaving 200 counties with no newspaper and roughly half the counties in the country with only one."

The piece also pointed to another culprit in newspapers' decline: big tech. Google and Facebook together Hoover up 77 percent of local online ad revenue, "compared to 56 percent on a national level," according to the Journal

But then, expecting large corporations to save print journalism is a little like relying on funeral directors to invest in the Mayo Clinic. The only journalism worth saving is averse to powerful interests, whether those interests are corporate, religious, political, or academic.

Bigger Isn't Better

Only in smaller, scrappier local entities should we place our faith and our dollars, because they are more likely to raise the Jolly Roger, fix a sword between their teeth, and wreak bloody havoc.

That's been the modus operandi of Phoenix New Times for almost 50 years, and it's a model that still works. Just ask those the paper has butt-whipped over the years, from former Maricopa County Sheriff Joe Arpaio to creepy former state Representative David Stringer, who'll be seeing New Times reporter Steven Hsieh in his nightmares till he croaks.

The Arizona Mirror, a nonprofit venture headed by veteran Phoenix journalist Jim Small, is about eight months in, but it's making a contribution to the local news scene and scores major kudos for giving Benson a new home after the illustrator was so shabbily treated by the Gannett goons.

But it's the Tucson Sentinel's success that local startups should aspire to emulate. Now in its 10th year, the online nonprofit boasts four full-time employees and a stable of regular freelance contributors.

Editor and publisher Dylan Smith founded the Sentinel not long after Gannett shuttered the Tucson Citizen in 2009, ending the Citizen's 138-year run. Smith had been the Citizen's online editor, and his tech savvy and love of local journalism won the paper a devoted readership and list of contributors.

Just over four years ago, Tucson's mayor honored the publication by proclaiming January 22, 2015, to be " Day." This year, the Arizona Press Club named Sentinel reporter Paul Ingram   "Community Journalist of the Year," with the judges commenting that his border reporting "rivals a lot of work that is produced for national publications." Smith took first place in the "Community Breaking News" category.

For Smith, the survival of journalism is about local content and local control. Beyond that, it depends on the community and business climate.

"Running into a community with some website-in-a-box template, I don’t think is a good idea," he told me during a recent confab. 

About eight years ago, he helped start a group called Local Independent Online News Publishers (LION Publishers for short), which now has 250 members across the country, some for profit, some nonprofit.

"The one common thread is to really upend the corporate chain/disinterested ownership model," he said. "It’s not just about having local reporters and editors but local ownership that is vital to having real equity in local news again."

That ethos harks back to a time when local families owned newspapers. For good or ill, these families were invested in their communities, unlike corporate monstrosities such as Gannett.

Smith sometimes wishes he had some more warm bodies to throw at stories. After all, he has to spend most of his time raising money to keep the enterprise going.

Still, "a small focused newsroom can really kick some ass," he observed.

Which reminds me of a phrase that was common in the 1970s, taken from the title of a popular book on sustainable economics by British thinker E.F. Schumacher:

"Small is beautiful."

Small and local? Doubly so.

(Full disclosure:
Phoenix New Times editor Stuart Warner's wife was laid off by the Republic in 2017.)

(Correction: The original version of this piece stated that Gannett bought and sold the Tucson Citizen in 2009. Gannett actually bought the paper in 1976 and closed it in 2009, in a still controversial move. Apologies for the error.)
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Stephen is a former staff writer and columnist at Phoenix New Times.
Contact: Stephen Lemons