Senate Minority Leader Charles E. Schumer wants to know how many journalists a hedge fund intends to lay off if it manages to take control of the publisher of USA TODAY.
The attempt by the hedge fund Alden Global Capital to take control of the newspaper publisher Gannett has the attention of the New York senator, who is expressing concern about the ability of the public to have access to local news.
Schumer’s interest should be no surprise, since the company, which also publishes USA TODAY and newspapers across the country, owns a number of upstate New York papers, as well.
“I was troubled to learn that MNG announced an unsolicited bid to acquire Gannett, which — in addition to USA Today — publishes several important newspapers serving smaller to mid-size cities in my state of New York: the Democrat and Chronicle in Rochester, the Elmira Star-Gazette, The Ithaca Journal and the Press & Sun-Bulletin in the Southern Tier, and The Journal News and The Poughkeepsie Journal in the Hudson Valley,” the New York Democrat wrote in a new letter to Heath Freeman, the president of Alden Global Capital.
The hedge fund, through its publishing arm Digital First Media, had made an unsolicited bid to acquire Gannett, which Gannett rejected. After that, the Digital First Media group, otherwise known as, MNG Enterprises, launched a proxy fight to get control of seats on the board.
“While the acquisition and ‘streamlining’ of Gannett newspapers might increase short-term profits for Alden Global and MNG, the long-term impact of liquidating these newspapers would be incalculable to my constituents,” Schumer wrote in his letter.
Digital First Media is known in the industry for its particularly aggressive cost-cutting to local and regional newspapers, including firing off staff and selling off newsroom real estate.
Among Schumer’s questions about what would happen if the hedge fund entity succeeds in gaining control of Gannett is plans for the real estate of the local papers, as well as the inevitable question of media consolidations: layoffs.
“If the proposed acquisition is successful, does Alden Global or MNG plan to lay off journalists at Gannett newspapers?” he wrote. “Will you make specific commitments to maintain newsroom staffing to ensure Gannett’s newspapers can continue serving their communities?”