Homer News and Peninsula Clarion sold in $120 million deal

Aug 9, 2017

Credit Courtesy of Homer News.

Morris Communications, an Augusta, Georgia-based media company announced the sale of the Homer News, the Peninsula Clarion and the Juneau Empire Wednesday. The three Alaskan papers were sold along with eight other daily and non-daily papers in a $120 million deal with GateHouse Media.

Homer News Editor Michael Armstrong said the deal was news to him Wednesday morning.

“I got an email from corporate, from Morris, announcing it,” Armstrong said. “They referred me to a press release on the Morris website. Then there was also an article released actually in national papers.”

But, Morris Group Publisher Deedie McKenzie says the Morris family, which has owned Homer News since 2000, has been looking to sell all three papers for about a year.

McKenzie will remain the papers’ publisher, and the deal is set to close on Oct. 2. McKenzie says details will continue to be worked out until then.

“So at this point we’re working through transitional stuff.  It’s business as usual,” she explained. “I can’t get into the details of what the future holds. I don’t Know. I don’t have a crystal ball.”

She adds the opportunity to join GateHouse will be an exciting one.

However, others say the deal is concerning. Jeff Gordon is the President of the Midwest-based union United Media Guild and is a regional president for the News Guild, the national union of news workers. Combined, both represent 18 GateHouse papers.  

He says the private equity firm backing GateHouse has been buying papers across the country since the newspaper publisher declared bankruptcy in 2013.

Gordon explains the firm, Fortress Investment Group, charges “external management” fees for managing GateHouse’s publicly traded parent company, New Media Investment Group, in order to pay dividends and to acquire more papers. He says publications bought by GateHouse typically suffer cuts as a result.

“They don’t own a lot of stock, the individuals that have backed all of this, but what they do have is the external management fees,” Gordon said. “It creates an interesting dilemma for a shareholder because the people running the company really aren’t concerned about the shareholders and the stock prices and the future of the newspapers.”

GateHouse typically farms out editing work to its office in Austin, Texas as a way to cuts costs, but there isn’t much left to cut at the Homer News and the Clarion.

Combined, both papers employ eight news staff and about 30 workers. McKenzie says there should be no staffing cuts during the transition.

Morris will still maintain a presence in Alaska with its magazine division, including the Alaska Journal of Commerce, Alaska Equipment Trader and the Chugiak-Eagle River Star. The building housing the Juneau Empire’s staff will also remain with Morris.

KTOO’s Jacob Resneck contributed to this report. 

Editor’s note: This story has been updated to include comment from Deedie McKenzie and the United Media Guild.