Gannet offers to buy Tribune Publishing

Those reporting on the demise of daily newspapers may be premature, as the largest publisher of daily newspapers is looking to get even bigger. Today Gannett, the publisher of USA Today along with 100 other daily newspapers, has offered to buy Tribune Publishing for $815 million. Tribune Publishing is the parent company of the Chicago Tribute, LA Times and nine additional daily newspapers. The overtures by Gannett to acquire Tribune Publishing occurs weeks after Gannett acquired Journal Media Group for $280 million. The offer from Gannett is 63% higher than the current stock price of Tribune Publishing, and the public offer puts pressure on Tribune to consider the sale. News of the possible acquisition sent Tribune stock up 54% this morning. Both Gannett and Tribune Publishing are clients of American Graphics Institute, who provided InDesign classes and Creative Cloud training to many of their publications.

While the possible acquisition shows Gannett’s continued faith in the news business, it further emphasizes that consolidation and cost-cutting remain key parts of their strategy for profitability. As part of their announcement promoting the idea of an acquisition, Gannett indicated that approximately $50 million in cost savings is possible. The CEO of Gannett, Robert Dickey said that cost cutting would “focus on areas that don't impact journalism”. The acquisition would also place Gannett as the publisher at the helm of daily newspapers in many larger markets including Baltimore, LA, Chicago, Hartford, Orlando, Milwaukee, and Memphis.

This announcement by Gannett comes less than two months after Michael Ferro took a controlling share of Tribune Publishing. Tribune does not yet appear convinced that being acquired by Gannett is in its best interest. The company released a statement that says in part: "Since the beginning of 2016, Tribune Publishing has been undertaking a transformation and has made significant organizational changes. With a focused strategy, unmatched collection of award-winning content and brands, and the right leadership team in place, Tribune Publishing is well-positioned to create value for shareholders."

In a statement today Gannett’s CEO indicated that the entire board of directors backed the acquisition. He said, “We believe Tribune shares the new Gannett’s unwavering commitment to journalistic excellence and delivering superior content on all platforms…the proposed combination of Gannett and Tribune would bring together two highly complementary organizations with a shared goal of providing trusted, premium content for the readers and communities we serve.”