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At least nine longtime employees of the State Journal-Register were
fired last week. The dismissals came less than a month after GateHouse
Media Inc. completed its acquisition of the State
Journal-Register and other Illinois and
Ohio dailies previously operated by Copley Press in a deal worth $380
million. Several advertising and marketing management
positions were among those eliminated, including those of advertising
director Tim Stacy, ad-production manager Ric Hamilton, online-sales
manager Paul Filip, and information-services manager J. Edward Baker. Another casualty was columnist Paul Povse, whose
career at the SJ-R spanned more than three decades.
Povse told Illinois
Times that he had an enjoyable tenure at the
paper and hoped to work in the newspaper business again. He referred other
questions to Sue Schmitt, publisher of the SJ-R and the Lincoln Courier. “I can’t discuss personnel
matters,” says Schmitt, who joined the newspaper last fall. The paper’s editor, Barry Locher, also declined
to talk about Povse’s dismissal; Francie Nagy, spokeswoman for
Fortress Investment Group LLC, which controls GateHouse, did not respond to
requests for comment. GateHouse, which owns 88 dailies and more than 200
weekly newspapers in 19 states, is best known for its business model of
aggregating small papers and its editorial approach of emphasizing
“hyperlocal” news coverage. Despite the $792 million debt the company has amassed
in its short existence, industry analysts agree that GateHouse is
outperforming many of its newspaper-company peers. Two days before the cuts at the SJ-R were announced, GateHouse also
finalized the purchase of four daily newspapers from Gannett Co. Inc., the
nation’s largest newspaper publisher. The papers that changed hands
are the Rockford (Ill.) Register Star; the Norwich (Conn.), Bulletin; the Utica, N.Y., Observer-Dispatch; and the Huntington, W. Va., Herald-Dispatch. The Copley and Gannett deals doubled
GateHouse’s size, in terms of revenue, company chief executive
officer Mike Reed told analysts and reports in a conference call earlier
this week. During the first quarter of 2007, the company
reported revenues of $95 million, 90.1 percent higher than last
year’s revenues of $50 million. Net income, however, fell from $405,000 in the first
quarter of 2006 to a loss of $5.3 million in the first quarter of this
year. During the conference call, Peter Appert, an analyst
at Goldman Sachs, characterized the numbers as “horrendous.”
Reed disagreed, saying that the acquisition pipeline
for GateHouse continues to be robust. “We see really nice upsides, and really
fantastic synergies with the Copley properties in Illinois,
especially,” Reed says.
Contact R.L. Nave at rnave@illinoistimes.com
This article appears in May 10-16, 2007.
