Report: Digital First, Owner Of Macomb Daily, Oakland Press, Bids To Buy Gannett -- Which Owns USA Today, Detroit Free Press

Employees have long complained about Digital First, which they call a 'vulture capital' company

January 14, 2019 - 7:51 am

(WWJ/AP) The Wall Street Journal is reporting that MNG Enterprises, better known as Digital First Media, intends to push USA Today publisher Gannett Co. to offer itself for sale.

The newspaper, citing "people familiar with the matter," reported Monday that MNG, which is backed by a hedge fund, holds 7.5 percent of Gannett's stock and has been rebuffed repeatedly by the company when it has approached it about a sale.

There was no immediate response to emailed inquiries to the two companies before office hours Monday U.S. time.

Digital First owns about 200 newspapers and other publications -- including the largest suburban newspapers in this area, The Macomb Daily and The Oakland Press. It has a reputation for cost-cutting, constant layoffs and no investment in products or employees, which has left employees to push for change with the hashtag #newsmatters. Employees refer to Digital First as a "vulture capital" company and say investors should be ashamed of the way profits come before anything else.

It recemtly laid off 30 people at the Denver Post, citing lessening profits. 

Gannett, based in McClean, Virginia, owns dozens of newspapers including the Record in New Jersey and the Arizona Republic in addition to USA Today. It also owns the Detroit Free Press. 

The Wall Street Journal report said Digital First plans to offer to buy Gannett for $12 per share, nearly a quarter above its closing share price Friday of $9.75. Gannett's shares have rebounded after a rough spell in 2018.

Per the Wall Street Journal, "Closely held Digital First is known for its contentious history with the newspaper industry in part because of its penchant for slashing costs. It said it has over the past few years made multiple approaches to Gannett about a deal but has been rebuffed."

Digital First owns about 200 newspapers and other publications including the Denver Post and Boston Morning Herald. It has a reputation for stringent, painful cost-cutting. Its biggest shareholder is Alden Global Capital LLC, a New York-based hedge fund that mainly invests in distressed companies, the report said.