David Ryfe (U-I photo)
The director of the University of Iowa School of Journalism says the purchase of the Gannett company by GateHouse Media is likely to lead to more cutbacks at the Iowa newspapers involved.
David Ryfe, has studied the issue of changes in the media, and says this development is good only for the lawyer sand bankers involved. “It’s not especially good news for the news organizations involved, or for the communities that are covered by those news organizations, “Ryfe says. “This is just another step down the road of the slow deterioration of news outlets across the county.”
Gannett owns the Des Moines Register and Iowa City Press Citizen. Gatehouse owns two daily newspapers the Ames Tribune and The Hawk Eye in Burlington, along with five weeklies: the Boone News-Republican, Dallas County News, Hamburg Reporter, Nevada Journal and Perry Chief.
Ryfe says the staffs at the papers owned by both companies have already been pared to less than half of what they once were.
“Gannett itself and GateHouse itself have been in the business of doing more with less for about a decade now since the Great Recession. And this is just another step down that road. I mean, I could imagine being a journalist in the newsroom of all these organizations and wondering what this means for me,” according to Ryfe.
He says an annual report on ad revenue used to show papers getting 40% of the attention and 20% of the ad revenue. That has declined to 4% of the attention and 8% of the ad revenue. “My best guess is that eventually those numbers will align — and that means about half of the advertising revenue that is currently going to newspapers will likely be cut. And that’s going to cause further declines in these news operations,” Ryfe says.
Newspapers have been trying to adjust by putting out digital newspapers online. But, Ryfe says that creates a whole new issue for them. “When newspapers go digital, something happens, which is they are no longer competing with local information sources any longer. They’re competing with all the information sources online,” Ryfe says. “So, they enter actually a different information market when they go online — and they are not doing very well.”
He says Facebook and Google control a majority of the online ad revenue. “The amount of digital ad revenue going to newspapers has been flat for the last decade. So, as we’ve had this enormous growth in digital ad revenue, newspapers have not been able to attract it,” he says. “What they’re going to is a more of subscription model — which the New York Times now is the best example of.”
Ryfe says the dilemma at the regional and local newspapers is they have not been able to get enough people to buy the digital subscriptions. There have been some predictions that printed newspapers will go away — but Ryfe says it’s possible they won’t disappear altogether.
“The best guess is that most of these local or regional papers will likely go down to maybe three days a week. Most of them will survive based on what the local advertising market will bear,” Ryfe says. “And there is an economics for local news in the local ad market. There are supermarkets that need advertising, there are car companies that needs advertising, there’s housing that needs advertising.” Ryfe says the bigger the city, the bigger the local ad market that will be available to the newspapers.
The $1.4 billion Gannett purchase deal is expected to formally close by the end of 2019.