The parent company of GateHouse Media, which bought local newspaper The Register-Guard last year, said Monday that it will acquire its competitor Gannett Co. for $1.4 billion.
The companies are the two largest newspaper publishing chains in the United States. Gannett is the publisher of USA Today and New Media Investment Group is the parent company of GateHouse Media, which owns The Register-Guard and hundreds of other papers across the country.
GateHouse is known for aggressively cutting costs and has laid off newsroom staff in the past. The merger will allow the combined company to cut $275 to $300 million annually “while continuing to invest in newsrooms,” the companies said in a joint press release. But the release did not mention layoffs or other cuts to newsrooms.
The Register-Guard, the daily newspaper for Eugene and surrounding areas, was bought by GateHouse Media in January 2018. Since then, reporters, copyeditors and other RG staff were laid off, the Eugene Weekly reported.
Shanna Cannon, the publisher for The Register-Guard who was hired after GateHouse purchased the paper, did not respond to requests for comment before publication.
Once the merger is complete, the company will retain the Gannett brand name. Following the completion of the merger, which is expected to close at the end of 2019, Gannett shareholders will hold 49.5 percent of the company and New Media Investment’s shareholders will hold 50.5 percent, according to the press release.
The merger must receive regulatory approval from the Federal Trade Commission and the Department of Justice as well as approval from each company’s shareholders.
GateHouse Media publishes 154 daily newspapers and 579 publications in 39 states states, according to the company’s website. According to the press release, the merger will expand the combined company’s reach to 263 daily publications in 47 states and Guam, in addition to USA TODAY, which reaches 145 million unique visitors a month.
Newspaper circulation has been declining since the 1990s, according to Pew Research Center data, and while online traffic has stayed steady for many publications, it hasn’t made up for losses in advertising revenue.
New Media Investment Group said in regulatory filings with the Securities and Exchange Commission that decreases in circulation is a risk to their business. “We have been able to maintain annual circulation revenue from existing operations in recent years through, among other things, increases in per copy prices,” the company wrote in May. “However, there can be no assurance that we will be able to continue to increase prices to offset any declines in the number of subscribers.”
The company said in its second quarter earnings that its digital subscribers now total 195,000, an increase of 54.6 percent a year prior.