It wasn’t that long ago that newspapers were the number one source of current events on the local, national, and international level. Yet, as the Internet grew and this information became more widely available, more and more newspapers went out of business. In fact, nearly 2,000 local newspapers have disappeared since 2004, leading to about a 25% drop in newsroom employment.
There’s another trend in this business, too: mergers and acquisitions. Most recently, GateHouse Media bought out Gannett Co., which owns USA Today and a number of smaller local papers, including 13 here in Louisiana. The merger will leave GateHouse with more than 260 daily newspapers and about 300 weekly newspapers. It’s print circulation will reach nearly 9 million, which is 7 million more than its closest competitor.
Mergers like this one are becoming more prevalent in the newspaper industry as local newspapers struggle to generate ad revenue in their prints. Although some major newspapers are able to make up for these losses with online subscription, local newspapers aren’t so lucky. This leads to bigger companies swooping in to merge or acquire these smaller newspapers in hopes of centralizing operations and reducing costs. Also, companies with large newspaper circulations may be better able to sell national ads that generate the revenue needed to survive in this struggling business.
This recent merger between GateHouse Media and Gannett Co. highlights the important considerations that must be made before taking action in the legal world. A merger or acquisition may help the parties expand operations, enter new markets, and reach new clienteles. These are delicate deals, though, so they need to be carefully negotiated. This is where the assistance of an experienced legal advocate may prove beneficial.