Wall Street Journal: Owners of Dover Post and News Journal in merger talks

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The Wall Street Journal (paywall) is reporting that newspaper giants Gannett and Gatehouse are in merger talks.

A merger of the two companies would create the nation’s largest newspaper chain, with a presence in all areas of Delaware in print and online

Gannett owns the News Journal in New Castle and the Daily Times, just across the state line in Salisbury, MD.

The two chains have weeklies throughout the state of Delaware.

Gateway entered Delaware more than a decade ago with the purchase of the family-owned Dover Post Co. and its weekly newspaper/websites in Hockessin, Middletown, Smyrna, Dover, Georgetown and Milford. Gannett has the Delaware Wave, which at last report operates out of Bethany Beach.

Other newspapers in the state are the Newark Post, Cape Gazette, Lewes-Rehoboth; Delaware State News,Dover and associated weeklies, Seaford Star and Coastal Point, Ocean View.

Both Gannett and Gatehouse are facing severe headwinds that have came as print and classified advertising revenues have plummeted. Efforts to replace print revenues with digital advertising revenue and subscriptions have not come close to bridging the gap.

Both Gannett and Gatehouse have made deep cuts in staffing over the past decade. Gatehouse essentially has “skeleton staffs” at its weekly properties in Delaware, with online content largely consisting of releases from government and other entitites.

Gannett fought off a takeover battle with the owner of Digital First, a chain of newspapers known for making bigger reductionsin staffing. Digital First is controlled by a private equity investor (Alden) that has not shown any concern over the impact of the cuts on coverage of community news.

Cuts in Colorado led to calls from the community for Digital First to sell the Denver Post newspaper.

Gannett has faced similar criticism as it slashed staffs at dominant newspapers like the Louisville Courier-Journal, Des Moines Register, Milwaukee Journal and Indianapolis Star.

Earlier, Gannett spun off its profitable stable of television stations and became a print-digital company. After a number of acquisitions, it has stopped buying newspapers and has instead invested in digital ventures. Digital First claimed those ventures have been a drain on Gannett’s core business.

Also backing off of acquisitions was Warren Buffett. His Berkshire Hathaway investment arm bought up dozens of newspapers (the closest being the Press of Atlantic City). Berkshire since halted further acquisitions, citing the poor state of the industry.

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