MILWAUKEE (AP) — Gannett Co. has reached an agreement to acquire newspaper company Journal Media Group for $280 million, giving the media giant control of publications in more than 100 local markets in the U.S., company officials announced Wednesday evening.
Journal Media publications dot the Midwest and South and include the Milwaukee Journal-Sentinel, Memphis (Tennessee) Commercial-Appeal and Knoxville (Tennessee) News Sentinel.
Industry experts say the publications are a natural fit for Gannett's strategy of maximizing short-term profits through managing the decline of publications in less competitive markets.
Gannett's "prevailing strategy is economy of scale," which involves reducing local costs and consolidating or regionalizing many operations, analyst Ken Doctor said.
"Undoubtedly, there will be some (layoffs) in any areas that can be centralized," including technology, newsrooms, human resources, finance and some advertising, said Doctor, who is president of Newsonomics, a website that monitors consumer media.
The goal is to "keep enough of a local presence to make enough people want to read you on a local level," he said. He went on to add, "Anything else you do on a national or regional level."
Gannett's flagship publication is USA Today, and it has used that publication's staff to produce national content for its local products.
Gannett this summer became a company that runs newspapers exclusively, having moved all of its television companies into a separate company, Tegna Inc.
The merger adds 15 daily and 18 weekly papers to Gannett's portfolio, according to the news release announcing the move.
"The publications of both Gannett and Journal Media Group have a rich history, a commitment to journalism, and a dedication to informing and being active members in the communities we serve," Robert J. Dickey, president and chief executive officer of Gannett, said in the statement. "Our merger will combine the best of each of our organizations to create a journalism-led, investor-focused company which will provide substantial value to the shareholders of both companies."
Tim Stautberg, president and CEO of Journal Media Group said the "transaction marks a critical next step in the transformation of our industry as we build local media brands that matter at a time when operational scale is a competitive advantage."
Journal Media Group was formed earlier this year, after Journal Communications Inc. of Milwaukee and E.W. Scripps Co. of Cincinnati combined their broadcasting operations under the E.W. Scripps name and spun off newspaper holdings into a separate public entity.
This story has been updated to correct the name of the television spinoff company to Tegna.