Last Friday Gannett Company, Inc. (NYSE: GCI) announced it had completed the purchase of Journal Media Group (NYSE: JMG) upon receiving approval from the U.S. Department of Justice (DOJ). Gannett acquired the Journal Media Group’s 15 daily newspapers and related digital assets.
Photo courtesy of Gannett
According to an October 2015 announcement about the pending purchase, Gannett would also acquire 18 weekly newspapers and add circulation totals of 675,000 from dailies and 950,000 from Sunday papers as part of the deal. In addition, Gannett will gain more than 10 million unique digital domestic visitors each month.
“Today’s announcement marks an important milestone as we combine two award-winning media companies with a passion for delivering outstanding news and information, each focused on digital growth across all platforms and devices and being the market leaders in our communities,” said Robert Dickey, president and CEO of Gannett, in a prepared statement.
Gannett now owns 107 dailies in 34 states and Guam, USA Today, and Newsquest in the U.K. The company is adding these daily newspapers to its stable of media properties:
- California: Record Searchlight (Redding) and Ventura County Star (Ventura County)
- Florida: Naples Daily News (Naples) and The Treasure Coast Newspapers (Stuart)
- Indiana: Evansville Courier & Press (Evansville)
- Kentucky: The Gleaner (Henderson)
- South Carolina: Anderson Independent Mail (Anderson)
- Tennessee: Knoxville News Sentinel (Knoxville) and The Commercial Appeal (Memphis)
- Texas: Abilene Reporter-News (Abilene), Corpus Christi Caller-Times (Corpus Christi), San Angelo Standard-Times and Times Record News (Wichita Falls)
- Washington: Kitsap Sun (Kitsap)
- Wisconsin: Milwaukee Journal Sentinel (Milwaukee)
“As the largest local-to-national media network in the U.S., this creates a portfolio of more than 100 local markets across the U.S., plus USA TODAY. By expanding our footprint, we further enhance the depth and breadth of our news-gathering capabilities, supported by USA TODAY NETWORK. Together we will grow our innovative products and best practices while providing added value to our consumers and advertisers, expanding the content offerings in our extensive portfolio and increasing the number of local markets we serve,” Dickey added.
Gannett originally announced its purchase of Journal Media Group in October 2015. The agreement was to purchase the company for $12.00 per share, or approximately $280 million, pending approval from Journal Media Group shareholders and the DOJ. The purchase will add an estimated $450 million annually to Gannett revenues with an EBITDA of approximately $60 million.
What’s next? Gannett said the company could realize $25 million in “synergies” (i.e., savings) with the “consolidation of corporate and administrative operations” over the next two years. Journal Media Group operations will be integrated with Gannett’s shared service centers, and printing and distribution assets in “multiple adjacent markets” will be consolidated. How Journal Media Group staff and real estate holdings will be impacted is not yet known.
Insider Take:
With the DOJ’s sign-off, the Gannett empire has grown by 15 daily and 18 weekly markets, giving it a foothold in more than 100 news markets across the U.S. This purchase gives Gannett the opportunity to expand its reach, and with the addition of new revenue exceeding the sales price by $170 million, this appears to be a solid investment.
This is just the latest in a line of big changes for Gannett. In 2014, the company announced it would separate its publishing and broadcast businesses into two separate entities. Just prior to that happening, Gannett purchased 11 titles from Digital First Media. Following that deal, Gannett said it would continue to target markets with populations of 500,000 to 3,000,000 and make purchases ranging between $200 and $250 million over the next few years, reported Poynter. In other words, there are more purchases to come.
