Gannett’s CEO is getting rich by gutting a newspaper near you
I’m standing outside what used to be the newsroom of The Patriot Ledger in an office park in Quincy, wondering if Mike Reed has ever heard of the Ledger, or even Quincy.
I make a mental note to ask him.
Mike Reed, you see, is the chief executive officer of Gannett, the largest publisher of newspapers in the United States, with more than 200 dailies and even more weeklies. Good guy, people say, so let’s go with that. His corporate bio doesn’t list any hobbies, but maybe he walks rescue dogs at his local no-kill animal shelter on Sundays.
To be clear, Mike Reed didn’t cause the seismic collapse of the newspaper industry. No, larger forces had everything to do with that. But Mike Reed has inflicted brutal and probably irreversible damage on already struggling news organizations all across this country. Mike may well lead the league in bad decisions, every one of them made with the confidence of someone who never gets anything wrong.
More debt? Mike’s your guy. Distant, unresponsive ownership? Where’s Mike? Fewer journalists? Nobody’s better at sending them to the unemployment line than Mike.
Mike Reed used to be the CEO of GateHouse Media, which had the proud distinction of not being the worst of the private equity-driven raiders that were buying newspapers, gutting them for profits, then leaving them as scant shells of what they once were. In 2019, Reed set his sights on Gannett, another massive newspaper consolidator, albeit one with a prouder history. GateHouse bought Gannett, took its name, and made Mike Reed the CEO.
At the time, Reed said the combined companies would save some $300 million in “efficiencies.” Pressed by a New York Times reporter in 2019 for some estimate of how many newsroom cuts the chain could anticipate, Reed replied, “I can’t give you an exact number, but almost nothing.”
Good one, Mike. Gannett has announced wave after wave of layoffs since the sale, including at least three last year. It forced employees to take furloughs and other assorted pay cuts, paused the company 401(k) match, consolidated and closed papers, and froze hundreds of open jobs. Joshua Benton, the director of the Nieman Journalism Lab, wrote a lengthy story on the implosion of Gannett’s circulation this month in which he said the employee count was cut in half since the 2019 sale.
There’s more. Gannett stock has plunged about 70 percent under Reed’s leadership. The company is groaning under more than a billion dollars in debt from the sale, debt that had an initial interest rate north of 11 percent. Did Reed buy Gannett with a Discover card?
So you, like me, might wonder what a company pays a CEO who has inflicted this kind of generational damage on journalists, on a particularly fraught industry, on many millions of would-be readers and the communities where they live, and on shareholders. The answer, courtesy of the most recent proxy: $7.7 million in 2021.
Let’s pause there. Does anyone really think Gannett couldn’t convince Mike Reed, a former CFO, to cause this kind of mayhem for $2 million a year, or maybe $1 million, instead of eight? Does anyone think that Reed deserves to be paid more than the CEO of The New York Times Co., which he is?
I took a quick look at the Gannett board of directors, thinking there’d be someone who might talk some sense. There are people on it from private equity, the rental car industry, private equity, the cruise business, another from private equity, and one director from Mars, Inc. who formerly held the title of, and I quote, “President, Chocolate.” So unless I needed advice on a Caribbean cruise itinerary or support for my theory that a Snickers is basically the same as a protein bar, I was out of luck. One question: Would it be crazy to have a board member with some expertise in journalism for a company that produces, well, journalism?
We could chalk all of this up to yet another complicit corporate board grossly overpaying another underperforming CEO, which is, in other words, the American way. But there is something else at play here: We are at a perilous moment in our civic life. You’ve heard it before and I’ll say it again: Democracy is under threat. Quality information is in short supply. Misinformation and disinformation are all over your social media feeds. Lies have become the currency of a certain kind of office-holder at every level, right down to your local school committee.
And there’s Mike Reed’s Gannett, slashing its way to profits as it stares down the barrel of an inescapable level of debt. Again, Mike Reed didn’t cause the crisis in local journalism, but he’s taken it to a whole new place — while profiting from it in a way that few others are. A nod here to local media analyst Dan Kennedy for raising the subject of Reed’s exorbitant pay last year.
The Patriot Ledger, which had a couple of hundred journalists at its peak, now has four news reporters. Four. When I worked there out of college, we had three people covering the town of Plymouth, and it was hailed as one of the best suburban papers in America. It’s hardly the only remnant. There’s The Cape Cod Times, the Providence Journal, the Brockton Enterprise, the MetroWest Daily News, the Worcester Telegram & Gazette — none better for Gannett’s stewardship. And so many reporter-less weeklies all over Massachusetts and beyond.
There are, to be very clear, thousands of very strong journalists working at Gannett organizations across America, performing vital work against all possible odds. Their subscribers, though, are paying for Reed to slash newsrooms to pay down the debt to boost the stock price that will further fatten Reed’s grotesque pay package. It’s really that basic.
I reached out to Gannett to request an interview with Reed. I got a nice note back from Lark-Marie Antón, the chief communications officer, saying that they’re seeing “improving revenue trends in Q1,” expect to “repay at least another $120 million” in debt this year, and that they’re “focused on delivering remarkable work every day.” Mike Reed, she said, was not available.
That’s too bad. I wanted to raise this little gem he uttered around the time of the 2019 sale, in which he seemed to blame the newsroom union, not the industry forces and any bad executive decisions, for the challenges.
“I frankly think the Guild’s a big problem,” he said. “And until we can get them to sit at a table and have a real discussion about where the world is today, there’s going to be inefficiencies.”
That’s Mike Reed. He looks across the vast carnage of his work and sees a lot of unemployed journalists who are to blame.
Gannett will be reporting executive compensation for 2022 in the coming weeks. The prediction here is that Mike Reed, unlike the rest of his company, will have done just fine.
Brian McGrory is a Globe columnist. www.bostonglobe.com.