What happens to the CJ in the increasingly likely event Gannett adds the Los Angeles Times and 40-plus other titles?

By Jim Hopkins
Boulevard Publisher

To paraphrase a famous misquote, what’s good for Gannett is good for its Courier-Journal subsidiary here in Louisville. That was the gist of Gannett’s argument in favor of its $815 million offer last spring for Tribune Publishing — now called Tronc, the parent company of The Los Angeles Times, Chicago Tribune, seven other big dailies, and 160 smaller weekly and monthly niche titles and their more than 7,000 employees.

CJ August 29 2016
Today’s front page.

“As one company,” Gannett said April 25 in disclosing its surprise offer, “Gannett and Tribune would have the financial stability to continue maintaining journalistic excellence, independence, high standards and integrity for years to come.”

The immediate path to that goal would be the $50 million Gannett predicted the two companies would save if they consolidated overlapping functions, which means eliminating jobs in areas like finance, marketing and production, and through greater purchasing power for things like newsprint and technology.

Today, with the Tronc deal looking more likely than ever — a published report last week said the two companies are now just haggling over a considerably sweetened final price — it makes sense to turn to the possible impact on the CJ.

The Louisville paper is a much smaller operation than it was 10 years ago, before the newspaper industry cratered during the financial collapse. It’s no longer Kentucky’s dominant statewide paper, and its influence even in Louisville has diminished as other news outlets have started from scratch (Insider Louisville) or bulked up (WDRB and, just last month, LEO Weekly’s parent).

Gannett logoBut the CJ is still a local player. And it’s also benefited from Gannett’s consolidation: Louisville is home to a big production hub that, in addition to the CJ itself, designs a couple dozen other sister newspapers. That reduced costs by more efficiently doing all the work in one place — especially in a lower-wage market — rather than in dozens of separate worksites.

The CJ also houses a customer service call center that handles subscriptions for other Gannett dailies as well, once more saving money by not maintaining dozens of smaller, separate customer-service departments at each of its many newspapers. And the CJ prints other papers, including the Lexington Herald-Leader, starting the first of this month.

Tronc logoGannett will apply the same strategy to the Tronc papers in the L.A. area; Chicago; Hartford; Baltimore, and in Florida in Orlando and Fort Lauderdale. And that’s on top of the many smaller titles in the suburban markets of those cities. Spinning the deal in the most positive direction for Louisville, the CJ could gain more work serving many of those Tronc titles. And it wouldn’t take long.

Last month, Gannett reportedly started moving page production work from the Memphis Commercial Appeal to its Nashville newspaper hub, less than four months after it bought the paper and 14 other dailies from the Journal Media Group of Milwaukee.

Plus, undeniably, Tronc’s big dailies would bring cachet — and reporting firepower — from two of the nation’s biggest journalism markets: Los Angeles, the news center of the film and entertainment industry; and Chicago, the nation’s third most-populous city after New York and L.A., and the corporate home of Boeing, United Continental airlines, and seven other Fortune 500 companies. And it would strengthen the company’s hand in Florida, where it already owns six dailies.

In all, Gannett owns 109 dailies in the U.S. and the U.K. It’s been a 100% newspaper company since it was split off from its sister TV station and all-digital businesses last summer. Those properties are now owned by a separate company called Tegna, which in Louisville owns WHAS.

With Tronc, there’s a lot of work to consolidate, too. It had nearly 7,200 employees at the end of last year, according to its annual Securities and Exchange Commission report, vs. Gannett’s 18,700.

The Gannett figure, from its annual SEC report, doesn’t include the employees it took on from Journal Media and, most recently, The Record of Bergen County and other New Jersey Media Group properties it acquired last month. Still, the addition of 7,000-plus new employees would give Gannett lots to chew on.

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