Last Thursday, Gannett Co., Inc. announced it was eliminating the Chief Executive Officer position for Gannett’s operating company, Gannett Media Corp., leaving CEO Paul Bascobert without a job. Bascobert took the role in August 2019, helping to facilitate the $1.1 billion merger between New Media Investment Group and Gannett in November.
According to a June 18 news release, Gannett Co. said the decision to end Bascobert’s employment was mutual. It was not due to any inappropriate action, violation of company policy, accounting irregularity or material deterioration of the business. Prior to joining Gannett, Bascobert was a former executive with Dow Jones, Bloomberg and XO Group Inc., reports USA Today.
Michael Reed, who serves as chairman and CEO of parent company Gannett Co., will take over Bascobert’s responsibilities.
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“The Board and I would like to thank Paul for his contributions during such an important period for our Company. Paul made a significant impact, helping to integrate the two companies, navigate through this current pandemic and lay the groundwork for our revenue transformation,” said Reed in the announcement. “The Board remains committed to our plans for continued integration and transformation.”
Bascobert commented on his brief tenure at Gannett Media Corp.
“I am proud of the progress Gannett has made in bringing together two great media companies. It is a terrific team with a bright future. I remain committed to the importance of journalism in our country and wish nothing but great success for Gannett,” said Bascobert.
The year has been a rocky one for many news organizations, including Gannett. In March, Bascobert asked employees to make a “collective sacrifice” which included significant unpaid furloughs and pay cuts. While online traffic at Gannett’s 260 newspapers had gone up dramatically during the coronavirus crisis, ad revenue was down significantly.
“Our plan is to minimize long-term damage to the business by implementing a combination of furloughs and pay reductions. By choosing a collective sacrifice, we can keep our staff intact, reduce our cost structure, deliver for our readers and clients and be ready to emerge strong and with opportunity to grow when this crisis passes. Following this announcement, you will hear from your leadership on the specific actions to be taken in your area, many of which will begin as soon as this week,” Bascobert said at the time.
“We realize these actions will put economic hardship on all of you and I don’t take these measures lightly,” Bascobert added in his memo to employees. “I would simply and humbly say ‘thank you.’ Our goal is to ensure that when we get through these difficult times, we emerge fully able to continue our important role serving our readers, clients and communities.”
As part of the cutbacks, Bascobert said he would not draw a salary and some Gannett executives would take a 25% pay cut until the furloughs and pay reductions have ended. It is not known if Bascobert is drawing a salary yet, or if there was a severance package offered.
Two weeks later Gannett Co. reported a net loss of $80.2 million in its first full quarter since its November merger with New Media Investment Group. Due to the acquisition, the company saw revenue increases, but the company said it would continue to execute its operational and integration plans. Doing so would help the company realize synergies by reducing redundancies and paying down debt. During the first quarter, the company reported $75 million in annualized synergies, including $19 million realized in the first quarter alone. The company expects to achieve $140 million in annualized synergies throughout the course of the year.
C-Suite executives come and go all the time, so this news shouldn’t come as a surprise, but it does. It seems like there is more to the story than what we are hearing. It would make sense that Bascobert was hired to help with the merger, but it doesn’t make sense for Gannett Co. to let go a CEO who isn’t drawing a salary. What is the benefit?
Also, while it is customary to say the parting of ways was mutual, it is unusual to point out that Bascobert’s termination was not due to any inappropriate action or missteps on his part. Why was it necessary to say that? Was terminating Bascobert after the merger part of the plan all along? Did Gannett Co. need someone to be the bad guy to announce the furloughs, pay cuts and layoffs? It doesn’t quite add up.