In a report about the sale of the Morris Communication newspapers to Gatehouse Media, the Alaska Dispatch News labeled Gatehouse a New York “conglomerate.”
Because in some journalists’ view of business, conglomerates are bad things. New York is the media capital of the world. Except when it’s not.
GATEHOUSE NOT A CONGLOMERATE
The definition from Investopedia says a conglomerate is a corporation made up of a number of different, seemingly unrelated businesses. Like Westinghouse, for example. Or Johnson & Johnson. But not Gatehouse, which clearly is a media focused company.
Also, Gatehouse Media is not from New York City, which was the implication. The company is modestly headquartered in the town of Perinton, N.Y., population 47,000.
Gatehouse, which went through bankruptcy reorganization in 2013, reemerged with a new holding company, New Media Investment Group. That is still not a “conglomerate.”
In 2007, Gatehouse purchased 14 daily newspapers and other publications from Morris Communications, so the relationship between these companies goes back at least a decade. Both companies have tried to diversify to stabilize their newspaper divisions, with limited success.
Dispatch editors used “conglomerate” as a pejorative to draw a distinction between that and a locally owned newspaper, a not-conglomerate. Never mind the irony that the Dispatch‘s owner, Alice Rogoff, is married to one of the richest and most successful private investment bankers in the world, whose vast holdings of unrelated businesses make traditional conglomerates look small-time.
WHO WILL BUY THE DISPATCH?
The Morris Communication announcement of the sale of all of nearly all of its news division came as a shock to media professionals, not just because Morris has been a steady company in Alaska for the past nearly 50 years, but it’s also the company that seemed to have the skill and scale to save the Alaska Dispatch News as it founders on debt.
Later in the story about the Morris newspapers, the ADN newswriters took a stab at answering the elephant question in the room — the Dispatch owner’s own financial struggles:
“Alaska Dispatch News is dealing with the challenges of the [newspaper] industry as well. ADN owner and publisher Alice Rogoff is ‘in discussions with several potential new investors’ in the company, she told staff in an email last week,” the reporters wrote.
With Northrim Bank having first position on 100 percent of the newspaper assets while it continues to hemorrhage cash, it’s unlikely that Rogoff will find any investors who will pony up funds while allowing her to remain at the helm. There could be a bail out, a buyout, or a bankruptcy reorganization, but an investor?
Not likely, considering the newspaper’s dire financial straits together with Rogoff’s tendency to both initiate and attract lawsuits. Here are some recent examples:
- Immediately after purchasing the newspaper from McClatchy in 2014, Rogoff sued McClatchy over a contract it had with the Associated Press that she inherited with the sale.
- When she and her business partner Tony Hopfinger broke up in 2015, she allegedly stiffed him for $900,000 and he’s suing her for that contract, written on a bar napkin.
- Rogoff has recently been sued by her suppliers and contractors.
For the newspaper to report that its owner is in discussions with potential investors is either offering fake news to the readers or reflects naivety on the part of the newsroom. Our bet is the latter.
“(W)e’ve been challenged by changing economic and financial circumstances, to say nothing of evolving news reading habits,” Rogoff wrote to employees, recently.
Rogoff went on to explain that deliberations with potential investors “are private and must be kept that way, so I cannot comment on their status. The goal is simple: to keep the state’s major newspaper in the business of delivering both printed and digital news of, and for, Alaskans.”
And with that, media observers are waiting for another shoe to drop, perhaps as early as this week.