Juneau Empire, Peninsula Clarion, Homer News sold to GateHouse Media

The Juneau Empire is located at 3100 Channel Drive. Its building was not included in the sale to GateHouse Media and will be retained by the Morris family.
The Juneau Empire is located at 3100 Channel Drive. Its building was not included in the sale to GateHouse Media and will be retained by the Morris family. (Photo by Heather Bryant/KTOO)

The Juneau Empire, Peninsula Clarion in Kenai and weekly Homer News are among 11 papers being sold by Morris Communications to GateHouse Media for a reported $120 million.

Newsrooms learned about the sale of their papers to GateHouse Media early Wednesday morning. The upstate New York-based chain is one of the fastest growing media companies in the country.

“I got an email from corporate, from Morris announcing it. And they referred us, they referred me to a press release on the Morris website,” said Homer News editor Michael Armstrong who has been with the newspaper since 1999. “The GateHouse people are visiting the Morris properties today and tomorrow and they’ll come down to Kenai and Homer and we’ll find out more from them.”

The Juneau Empire has been owned by the Georgia-based Morris family since 1969. They also bought the Peninsula Clarion in 1990.

“The sale will actually be final Oct. 2 and after that we’ll know a lot more, so for now it’s really business as usual,” said Publisher Deedie McKenzie.

The Kenai-based executive said she’s been told she’ll be kept on by the new company and that the Morris family had been looking at selling the newspapers for about a year.

“GateHouse was a really good fit and it’s a great opportunity for these newspapers to also become part of a larger newspaper company,” she said. “They’re in 36 states, so it’s a great opportunity for us.”

The off-loading of 11 newspapers by the family-owned Morris chain is part of an industry-wide trend.

“I think we’re in a period of quite a lot of consolidation,” said media analyst Rick Edmonds of the Poynter Institute. “Even the language of the press release sort of follows the story line that’s been developing, which is that it’s harder and harder for either individual papers or smaller chains to stay competitive.”

GateHouse now owns more than 130 newspapers in mostly small- and mid-sized markets, more than any other chain and finds ways to consolidate its holdings for efficiency.

“They have a very large copy editing and layout center in Austin, Texas, that does all of their papers,” Edmonds said.

The company emerged from a $1.2 billion bankruptcy in 2013 and has since been recapitalized by a private equity firm. Since then, it’s expanded rapidly into the nation’s second-largest newspaper chain, after Gannett. Its parent company is a publicly traded company called New Media Investment, which is backed by a private equity fund.

The arrangement is unorthodox: Fortress Investment Group controls less than 1 percent of company stock but wields an enormous amount of control.

“The bigger the company gets, the more money the external manager Fortress collects,” said Jeff Gordon, a sports columnist with the Post-Dispatch in St. Louis. He’s also president of the United Media Guild, which represents unionized workers at 18 GateHouse papers. He’s critical of how a financial entity is rearranging small media companies.

“Basically, Fortress Investment Group operates as the external manager so it gets millions of dollars in revenue from quote-unquote managing this company and basically arranging for financing and backing purchases,” Gordon said.

The Morris family will retain some holdings in Alaska. It’s not selling the Juneau Empire’s building or the Alaska Journal of Commerce, Alaska Equipment Trader and the weekly Chugiak-Eagle River Star.

KBBI’s Aaron Bolton in Homer contributed to this report.

Editor’s note: This story has been updated to include comment from Deedie McKenzie and the United Media Guild.

Jacob Resneck, CoastAlaska

Jacob Resneck is CoastAlaska's regional news director based in Juneau. CoastAlaska is our partner in Southeast Alaska. KTOO collaborates with partners across the state to cover important news and to share stories with our audiences.

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