Article paints perfect portrait of what’s wrong with the Sun Journal

American Prospect, a non-profit website specializing in non-profit, independent journalism, has posted an article that is highly critical of GateHouse Media and explains much of what is going on at many of its properties, including the New Bern Sun Journal.

The headline states:

Saving the Free Press From Private Equity

Navigating the digital transition is a huge challenge for newspapers. Absentee ownership by private equity predators makes it all but impossible.

 

It’s a long read, but it does a good job describing the toxic nature of private equity enterprises taking over local newspapers and running them into the ground. Here’s one example cited in the article that sounds disturbingly familiar to those who have been observing what has been happening at the Sun Journal:

The Bastrop Daily Enterprise, in the northeast corner of Louisiana, was founded in 1904, part of a small family-owned chain. The newspaper did a thriving business, with 30 employees and $1.5 million in annual revenues. “We served our communities, won awards for our reporting, and made good money for the owner,” says a former staffer who asked that we not use her name. Then the Enterprise was bought by GateHouse Media, the newsroom was gutted, and all operations were centralized by the new corporate owners.

“Now they’ve got maybe eight people,” says this former employee. “They’re lucky if they’re doing $600,000 gross. I remember what these papers used to be. It’s unrecognizable.” Few citizens of Bastrop, however, know the reasons behind the wasting of the Enterprise because no one has reported on it.

The long-form article does not mention the Sun Journal specifically, but does include the Fayetteville Observer, a formerly family-owned newspaper that has undergone significant staff reductions since it was acquired by GateHouse in 2016.

In North Carolina, The Fayetteville Observer, founded in 1816, had been owned by the McMurray family since the 1920s and is the oldest North Carolina paper continually publishing. Fayetteville is hard by Fort Bragg. The paper has a daily circulation of about 62,000 across ten counties, and had been profitable and well managed. But family members, getting older, decided it was time to sell. Charles Broadwell, whose grandmother had been board chair, was the last family member running the paper. He engaged newspaper brokers to find a buyer. GateHouse, the biggest of the private equity players, took over the paper in 2016, making deep cuts in the newsroom and the business office, and moving the copy desk to their regional center. They raised the subscription price for a shabbier product. “It was like walking around at my own funeral,” Broadwell says.

There is hope, according to the article:
While newspapers will never be the money machines that they were in the glory days, they may yet endure as core institutions of American democracy.
However, against this bleak trend, being repeated at hundreds of papers nationwide, there is actually some good news. In some cities, private equity owners are selling newspapers back to local owners who are not looking for windfall gains but are committed to reinvesting in the newsroom and figuring out digital publishing. In other places, like Minneapolis, Philadelphia, and Boston, a category of new local owners whom we might call benign billionaires are devising new business models to allow papers to at least break even, while they give talented editors the freedom and resources to rebuild the newsroom and advance digital. While newspapers will never be the money machines that they were in the glory days, they may yet endure as core institutions of American democracy.

 

Again, the full article is here.

I have contacted Regional Publisher Mike Distelhorst and Regional Editor Pam Sander for their comments about the American Prospect article. I will post their replies if and once I receive them.

 

In the interests of full disclosure, you should know that I was the executive editor at the Sun Journal until October 2017, when I resigned for personal and professional reasons.

Once I discovered that at least one Sun Journal telemarketer was misrepresenting the circumstances of my departure from the company, I posted my resignation letter along with a memo  I wrote just prior to my resignation. A short time later, GateHouse Media sent me a cease and desist demand, which I present here in its entirety:

December 14, 2017

Mr. Randy Foster
Email: randy.foster@newbempost.com
Re: Your Legal Obligation to GateHouse Media, LLC

Dear Mr. Foster:
I am General Counsel of GateHouse Media, Inc. (“GateHouse”). GateHouse Media is the ultimate parent of the publisher of the New Bern Sun Journal (“New Bern”). I write to remind you of your continuing legal obligations to GateHouse under State and Federal law.

While you were employed by GateHouse, you were given access to unique, confidential, and proprietary business information including information regarding management options for potential layoffs. It has come to our attention that you are publishing such information on your personal blog – http://newbempost.com/myside. Under State and Federal law, the use of such confidential and proprietary information in this manner is prohibited. Further, State and Federal law dictate that you not disclose such confidential and proprietary information to anyone, or use such information for your own benefit or the benefit of others.

To the extent that you are using such information, we request that you immediately cease and desist from such use. Should GateHouse discover that this practice is continuing we will seek an injunction against and damages from all appropriate parties for such misuse.

We certainly trust and expect that you will fully comply with your obligations to GateHouse under State and Federal law, and that no legal action by GateHouse to protect its rights will be necessary. This letter sets forth our position on the matters contained herein and should not be deemed to restrict, prejudice, waive or limit any of our rights or remedies under contract, at law or in equity.

Very Truly Yours,
Polly Granfield Sack
Sr. Vice President, Secretary And General Counsel

I responded that I complied with their demand and took the memos offline, but made a cease and desist demand of my own:

Dear Mrs. Sack:
I am sole owner and operator of the local news website, NewBernPost.com, and a former GateHouse Media employee. I have complied with your cease and desist request in your Dec. 14 letter to me. I removed the article from public access on the evening of Dec. 14, along with social media links to the referenced. It will remain offline while I discuss the matter with my lawyer.

Meanwhile, I am requesting that GateHouse Media and Coastal ENC Group, their officers and representatives, cease and desist from misrepresenting the reason for my resignation from GateHouse Media, and cease and desist from disseminating private personnel records and information about me in violation of state and federal laws and your own company policy.
I expect a timely reply in which you explain steps that will be taking to satisfy my requests. Should I discover that this practice is continuing, I will seek an injunction against and damages from all appropriate parties for such misuse.

I certainly trust and expect that you will fully comply with your obligations to me under state and federal law and GateHouse Media policies, and that no legal action by me to protect my rights will be necessary. This letter sets forth my position on the matters contained herein and should not be deemed to restrict, prejudice, waive or limit any of my rights or remedies under contract, at law or in equity.

Very Truly Yours,
Randy Foster

January 7th, 2018 by
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