SHRINKING NEWSROOM: The NDN building in North Naples was sold to NCH Healthcare System in December 2020.
There was a mouse in The News-Press newsroom.
A literal rodent. Former staffers said there was more than one; there was an infestation that year. But this particular mouse, they named: Furlough. This was between 2009 and 2012, former staff writer Glenn Miller remembered. During that time, there were two or three rounds of furloughs—mandatory unpaid weeks off.
“Before everything changed, the paper was bursting at the seams,” Glenn Miller wrote in an email. There was a railroad spur behind the News-Press building, where huge rolls of newsprint were delivered. Miller used to joke that when the railroad cars left, they were packed with cash.
In 2006, advertising revenue, a newspaper’s lifeblood, declined sharply and didn’t recover. Nationally, Gannett, which owns The News-Press and Naples Daily News, has lost billions in print advertising since then.
Today, in many towns, the daily newspaper—and the term “newspaper” includes both a physical paper and its online product—is gone. More than 2,000 U.S. newspapers have closed in the past 15 years. Between 2008 and 2019, the number of newsroom jobs at U.S. newspapers dropped in half. In Southwest Florida, the drop in jobs has been much worse. There were about 200 journalists, editors and managers at The News-Press and Naples Daily News. Today, there are about 50.
“I wish I could say I saw a lot of flashes of what was happening,” writer Amy Bennett Williams says about the period before the attrition. “We’d pick up hints. But unless you were a business reporter or someone on the business side (management), you were just a reporter with her head down, trying to do her work.”
At face value, it’s hard to understand why these two papers have been so hard hit. The News-Press and Naples Daily News are considered to be among the most profitable in the Gannett chain, according to Rick Edmonds, a media business analyst for the Poynter Institute.
“They are good markets,” Edmonds says. “Well off, growing, with a lot of retirees who make good target readers.”
But Gannett traditionally manages from the top down, he said. “Targets— of profits and other initiatives—sweep those papers in with the rest of the chain.” Gannett would not disclose revenues or profits for the individual properties.
Miller accepted a buyout in 2012, having worked at The News-Press for 25 years. He was one of 11 who took a buyout on that round. Those former employees left with, in aggregate, more than 100 years of institutional and community knowledge. Miller’s last day was Friday the 13th.
WHY IT MATTERS
Studies show that in communities without newspapers, citizens are less informed, less civically engaged and less likely to vote. When they do vote, they are more likely to vote along party lines. Reliance on national news creates polarization. At a time when we need the shared set of facts that local newspapers can provide, they are slipping away in many areas.
“The community has to understand that we are the ones who are watching after the school board and the county commission and the city council,” says Cindy McCurry-Ross, the Southwest Florida editor of the USA Today Network, which includes The News-Press and Naples Daily News. “Watchdog journalism, if it went away, would leave a huge void.”
As Washington Post media columnist Margaret Sullivan puts it, “One problem with losing local coverage is that we never know what we don’t know.”
McCurry-Ross said that watchdog journalism is not going away in Southwest Florida. In May, the two papers were hiring watchdog, government accountability and education reporters.
A 2019 PEN America study concluded, “Without the accountability mechanism of local journalism, government officials conduct themselves with less integrity, efficiency and effectiveness. Corporate malfeasance rises in tandem with newsroom layoffs”— as does racial and economic inequality.
Papers around the nation have closed smaller bureaus, as The News-Press has done in Punta Gorda, Lehigh Acres, Cape Coral and Bonita Springs. There used to be a reporter dedicated to covering the city of Fort Myers, and one covering the courts. Now the reporters share information.
“A lot of our government coverage comes when it intersects our beat,” says Bennett Williams, who writes features and news. She does more watchdog reporting now, in large part because there are fewer reporters.
Lack of a watchdog affects our pocketbooks. “When local newspapers keep governments accountable, municipal borrowing costs are lower, ultimately saving local taxpayers money,” according to a 2018 working paper from the Hutchins Center on Fiscal and Monetary Policy.
Three in four Americans think local news is doing fine financially. But only 14% have paid for local news in the past year, according to a Pew Research Center survey conducted in 2018.
Southwest Florida readers see some of the same articles in both papers. They see a thinner physical paper. They see stories from USA Today, rather than local ones. They complain about the punctuation errors. (“We used to have a copy desk,” Bennett Williams says.) A former staffer at the Naples Daily News said that readers act like they think they pay for the news with their taxes, and balk when they hit a paywall. They don’t make the connection: News isn’t free.
HOW THE INTERNET BROKE THE NEWSPAPER
The business model for the daily physical newspaper had worked, as money poured in from subscriptions, classifieds and display ads. Advertising revenue dwarfed subscription revenue. With the rise of the internet, all three revenue streams crumbled.
Print classifeds all but disappeared when Craigslist happened, since people could list their boats and patio tables and puppies for free on a searchable, online platform. Revenue from display ads moved online—more and more to aggregators. Google now dominates this space, as a reader’s first stop for everything. Google and Facebook drive traffic to a newspaper’s website, but they don’t pay for the excerpts of stories they show.
Readers were bombarded with information on the internet, most of it free. Local newspapers chose not to charge, instead relying on digital advertising, which was a fraction of what print was in terms of cost and volume, and has never caught up.
The physical product continued to be how a newspaper made its money. But fewer paying subscribers shuffled to the end of the driveway each morning while their coffee brewed to collect the thinning paper.
The model was broken. But not in Naples.
OPTIMISM IN NAPLES
In 2006, Naples Daily News was expanding its audience and seeing double-digit growth in advertising revenue, even as the recession moved in.
“It didn’t seem like a down time,” says Andrea Lynn, then a member of the paper’s executive team. The paper had a loyal print subscriber base, and Lynn said everyone acted as if that base would be there forever.
For journalists, the internet was a playground. More room for content, the ability for readers to search, the power to enhance stories with videos and interactives. Naples Daily News formed a multimedia division, which garnered national attention for innovation. Its Studio 55 produced a newscast over the internet before anybody knew what a vodcast was. Ideas for new revenue streams coursed through the company, Lynn said.
The Daily News built a 186,000-square-foot building in North Naples. The facility cost $95 million, including offices and a packaging/distribution center. And a printing press—Swiss-manufactured, able to print 90,000 papers an hour and four stories tall. The building was designed around it.
“The new Wifag press thundered like a manic choir of oil derricks and sent newsprint zipping through threaded rollers at more than 35 mph,” wrote staff writer Harriet Howard Heithaus. “Its rumble was unmistakable— and reassuring.”
The staff moved into the new building in 2009. Today, looking back on newspapers as a whole, Lynn says, “It was a mature industry in denial.”
Trouble was becoming apparent across the Scripps network of newspapers. The first rumors of Scripps possibly exiting the newspaper business came during an investor conference call in January 2007. In 2008, there were layoffs at Naples Daily News. Lynn remembered 22 in one day, not only in the newsroom, but all over the operation. She called it especially painful because the Naples property was just fine. The decision came from corporate, she said.
Even so, in 2009, Lynn wrote, “We (Scripps) still believed.”
“Everybody got on their sassy horse,” Lynn says, believing they could sustain it all through advertising. “At the heart of the matter, newspaper executives were expecting the same kinds of margins on the internet that they were getting in print. That wasn’t possible—and it’s still not possible.”
In 2015, Scripps spun off its newspaper operation into a company called Journal Media Group (JMG). Gannett, seeing opportunity in consolidation, acquired JMG.
“For people who love a big chewy newspaper every day, it’s been a loss,” Bennett Williams says. “But to be able to cover the region is a good thing.”
STOPPING THE PRESSES
Gannett scrapped the press at The News-Press and took production to Naples. That hit everyone hard.
“I had a long romance with the factory part of our building, and the railroad tracks and the roller coaster conveyor system of the press,” Amy Bennett Williams says. “As bad as it was, it was even worse when they started punching holes in the walls to get the press out and haul (it) out. It looked like a setting for a first-person shooter RPG.”
Then the reassuring choir of oil derricks in North Naples stopped singing. The Wifag was disassembled and hauled out of the building. Both papers were printed in Sarasota in 2020 before production was centralized this spring in Stuart on Florida’s east coast.
That happened because Gannett had quite suddenly gotten much bigger. In late 2019, it merged with GateHouse Media, keeping the Gannett name. The company became the largest newspaper chain in the U.S., owning more than 260 dailies.
There would be layoffs. But it could have been so much worse, staffers said. Earlier in the year, a hedge-fund-backed group made a bid for Gannett. Hedge funds have moved into the newspaper industry with an end-game of selling, Edmonds wrote. They’ll provide liquidity when no one else wants to take the risk. They are known for ruthless cuts. They are set up to profit from the decline of a company’s stock.
Gannett rejected the offer, but it didn’t escape the obligation to private equity. For the GateHouse merger, Apollo Global Management provided financing of $1.8 billion at an 11.5% interest rate. Gannett also had a management agreement with Fortress Investment Group, to whom it paid $30 million for an early exit.
To pay for such things, Gannett uses the proceeds from real estate sales. It sold the News-Press building on Dr. Martin Luther King Jr. Boulevard to a real estate investment company from New York for $4.75 million. The Naples Daily News building went for $28 million to the NCH Healthcare System in December 2020. The Daily News now leases about 10,000 square feet of office space on part of the second floor.
In 2019, Gannett executives told the AP they planned to cut $300 million in annual costs by centralizing editing and web design and eliminating duplication in management, printing and advertising. The cost-cutting measures would be across the board.
Journalists at the News-Press, Naples Daily News, The Banner and the Marco Eagle unionized, forming the Southwest Florida News Guild. Its mission statement detailed the impacts on working conditions: “A merger between our parent company, Gannett, and GateHouse Media will continue to gut our newsrooms. Even before the merger, we faced stagnant salaries, increased workloads, rising costs for health insurance, inadequate compensation for mileage and, most critically, the inability to retain many of our most talented peers. That makes it difficult for us to maintain the level and quality of coverage our communities deserve.”
Many of the journalists hadn’t been able to afford to live in the community they covered. Reporter Alexi Cardona started at the Naples Daily News in 2016. She remembered that five or six staffers shared a house in Naples. Some worked second jobs; some commuted from Lee County.
In May, a study of 14 unionized Gannett newsrooms, including The News-Press and Naples Daily News, found pay disparities among women and people of color. Gannett disputes the findings.
Gannett’s audience revenues during the first quarter of 2021 were down 12.9% compared to the same quarter in 2020. Print advertising was down 24.9% and revenue from digital advertising and marketing services dropped 10.4%, the company reports.
That follows Gannett’s loss of more than a third of its revenue from newspaper advertising between the second quarters of 2019 and 2020. Company executives took a 25% pay reduction, and certain employees who earned more than $38,000 a year took one-week furloughs, once a month in April, May and June 2020.
The following month, Gannett exempted reporters and photographers from furloughs.
The memo, obtained by Poynter, read, “We must bring our reporting firepower back to full strength as we juggle the enormity of three major events—the pandemic, the fight for social justice and the looming election.”
The papers made COVID-19 stories free. Journalism is a public good, after all.
“These journalists have worked their tails off,” McCurry-Ross says. “I wish we would quit calling it a decline in local journalism. When we do it every day, it doesn’t feel like a decline.”
Against these odds, quality journalism is getting done. The papers have received many state, regional and national awards.
ADAPTING THE BUSINESS MODEL
Gannett has begun charging visitors for exclusive content, which McCurry-Ross said is a sea change in the business model, adding that the papers rely more than ever on subscriber revenue. It’s difficult to know whether the subscriber-exclusive model will be successful. Gannett does not disclose numbers of online subscribers by paper, and introductory subscription rates wouldn’t reflect success immediately.
Gannett is trying to grow audience and to build trust in marginalized communities, as are news outlets across the country, working to undo decades of ignoring those communities or of covering them only when something goes wrong.
“It’s the right thing to do to reflect the community,” McCurry-Ross says. “And if we’re to continue to grow our digital audience, we’ve got to bring in new readers.”
Sustaining local newspaper journalism will involve a combination of solutions. The corporate newspaper infrastructure needs to play a big role, as it’s the most comprehensive that exists. But digital subscriber growth alone won’t equate to financial stability. Gannett is exploring grants to support certain types of reporting.
There is some hope that Google and Facebook will pay newspapers for the excerpts they publish. There’s more serious consideration about potential government subsidies for newspapers, Edmonds said. Nonprofits and wealthy, civic-minded people are stepping in to support local journalism.
“I think the newspaper is going to find its way,” says Bill Barker, who was at the Naples Daily News for all of the corporate ownership changes. He arrived in 2013 when the paper was owned by Scripps. When he ended his term last year, he was the president and publisher of The News-Press and Naples Daily News, and a regional president for Gannett in Florida. He stepped down as a result of Gannett’s continued efforts to consolidate, Naples Daily News reported. He now does business consulting.
Barker said he believes the free market will eventually figure it out.
“I haven’t given up yet,” Barker says, “that there’s not a model or play that won’t sustain itself. I just don’t know what that is yet.”