Mar 26, 2024 - Business

Gannett CEO bashes NewsGuild: "Plays dirty and lies to our employees"

Illustration of a picket sign with a pen for a handle and a "No" symbol painted on it.

Illustration: Rae Cook/Axios

Gannett CEO Michael Reed didn't mince words when asked in an onstage interview last week how he's dealing with an uptick of union activity and pressure.

  • "I think the Guild, unfortunately, plays dirty and lies to our employees," Reed told Axios at the annual Mather Symposium on media in Atlanta.

Why it matters: Reed's comments — hotly disputed by union officials — are perhaps the strongest on record by a major media executive about dealing with union activity, but other news management teams face similar tensions.

Details: Asked to clarify ways in which the union lied, Reed said the Guild told employees that the company is using profits to buy back shares of stock and that the company is only cutting jobs to increase profitability.

  • In 2022, a Guild release inaccurately described the company's authorization to buy back shares as a repurchase of the shares, a Guild spokesperson said, but soon after corrected the error.
  • Reed also accused the Guild of lying about the company cutting jobs "to increase profitability," He said that's not true — "they're designed to keep a newsroom in the market itself," he said.

In response to his comments, The NewsGuild-CWA president Jon Schleuss said in a statement to Axios:

  • "Gannett's last SEC filing showed Mike Reed making 66 times that of a median employee, while paying journalists poverty wages, cutting an average of 2,800 jobs a year and hiring lawyers to stonewall workers at the bargaining table."
  • "It's a shame that Mike Reed is attacking journalists again instead of listening to them. If he did, he'd understand that the only sustainable future is to invest in the talented reporters, photographers and others who drive the company's success — not enriching corporate executives and shareholders."

Between the lines: Gannett has seen its fair share of union protests in the past few years amid efforts to consolidate in the wake of its 2019 merger with GateHouse.

  • Last year, hundreds of Gannett journalists across two dozen local newspapers went on strike during the company's annual shareholder meeting to protest job cuts.
  • Gannett has cut more than half of its workforce since the GateHouse merger. The company had approximately 10,000 employees as of the end of last year — down from more than 21,000 in 2019, immediately following the merger.
  • More than 1,000 Gannett employees are represented by The NewsGuild-CWA across more than 50 bargaining units.

Yes, but: Reed said Gannett is "near the end" with sweeping job cuts and claimed the company has hired 500 people in the last 12 months.

The big picture: Union activity and strikes have spiked in recent years as more newsrooms seek protections from cuts amid a brutal advertising environment.

  • The New York Times finally reached a new union contract last May after more than 1,000 staffers walked out.
  • Union workers in dozens of other newsrooms, from The Washington Post to Condé Nast, have also held work stoppages in response to job cuts.

Zoom out: Reed's comments come as the company pushes to drive more revenues from digital products.

  • Last week, Gannett and McClatchy both announced they would stop licensing content for syndication from the Associated Press, a major shift for both newspaper giants that together reach hundreds of local markets.
  • Reed said it was a coincidence that both chains' announcements they would stop using AP content came at the same time. Gannett made its decision a while ago, he added.

Reed said AP stories were "the least performing content" across Gannett websites and platforms, which is in part what fueled his decision not to renew the license when it expires at the end of the year.

  • In foregoing payment to the AP, Gannett says it will be able to invest more in its own journalism and syndicate that content instead.
  • In response, the AP said, "We are disappointed in this news from Gannett and McClatchy, as conversations with both news organizations have been productive and are ongoing. We remain hopeful Gannett and McClatchy will continue to support the AP beyond the end of their membership terms."

What to watch: Reed said Gannett would continue using the AP's data in its election coverage this cycle, but is undecided for future cycles.

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