Update Monday 11:23 a.m.: MNG Enterprises moved forward with its takeover attempt Monday morning, sending a letter to Gannett proposing to buy the company for approximately $1.36 billion. In its letter, MNG criticized Gannett’s “leadership void,’’ saying the company’s executives have “not demonstrated that is capable of effectively running it has a public company.’’
In addition, the letter said Digital First saves newspapers.
“When other people won’t step up, we do,’’ the letter said. “We save newspapers and position them for a strong and profitable future so they can weather the secular decline.’’
Monday: 8 a.m.: A media group known for buying struggling newspapers and then gutting newsrooms and slashing costs is reportedly about to make a pitch to land one of the biggest names in newspapers. MNG Enterprises, a newspaper chain owner backed by hedge fund Alden Global Capital, is preparing to make an offer to purchase Gannett.
The bombshell news was broken by the Wall Street Journal on Sunday night.
According to the WSJ’s sources, MNG, better known as Digital First Media, has built a 7.5 percent position in Gannett’s stock and “plans to publicly urge the McLean, Va., publisher to put itself up for sale.’’
If this happens, history suggests it would be dire news for the industry in general and, in particular, Gannett, which owns more than 100 daily newspapers. That most notably includes USA Today, as well as major dailies including The Indianapolis Star, The Detroit Free Press, The Tennessean, The Arizona Republic and The Milwaukee Journal Sentinel.
Digital First Media already owns 56 daily newspapers, including The Denver Post and Boston Herald.
When news broke Sunday night, reaction was swift and pessimistic.
Washington Post media columnist Margaret Sullivan tweeted, “They damaged everything they’ve touched, so this is terrible news.’’
Wall Street Journal media and tech writer Keach Hagey tweeted, “After watching what Gannett has done to my hometown paper — cutting most of the staff, outsourcing printing so far away local sports scores can’t appear the next day — I’m fascinated to learn what fat Digital First thinks is left.’’
Digital First does not have a good reputation among journalists. That was never more evident than last year when The Denver Post publicly revolted against its owner, publishing several articles and editorials blasting Digital First and pleading for the paper’s survival. One editorial went as far as to call Digital First “vulture capitalists.’’ It pleaded for the owners to sell the paper if it was not going to run it properly.
It should be noted that that the WSJ article said it was unclear if Gannett would entertain the offer to sell. Early Monday morning, CNN’s Brian Stelter tweeted out an internal memo from Gannett’s CEO, Bob Dickey, that said:
You may have recently seen media stories regarding MNG Enterprises, or Digital First Media, and their plan to make a proposal to acquire our company.
To date there has been no communication to Gannett regarding a proposal. The company and board are well advised, and if we have more information we will keep you informed. During this time, it’s business as usual for us and we need to stay focused.’’
Dickey announced last month that he would retire in 2019.