After Adelson: Gatehouse Moves to Repair Las Vegas Damage
The company that runs the Las Vegas Review-Journal is taking steps this week to repair its reputation after a series of reports of sketchy-seeming journalistic practices related to the recent sale of the newspaper to casino magnate Sheldon Adelson (“The new breed of newspaper mogul: On Adelson’s Purchase of the Review-Journal”).
Gatehouse editor Dave Butler is being tapped to lend a veteran hand to the paper in turmoil, POLITICO has just now reported (”Review-Journal brass brings in Dave Butler to guide newsroom”). The notion: Review and rebuild journalistic confidence in the newsroom, and for the readers, after the multiple disruptions caused by Adelson’s purchase of the paper in mid-December.
Butler himself only joined the growing New Media Investment Group (or Gatehouse, its legacy name and how it is still referred to in the industry, given the generic new monicker it picked) in October as editor-in-chief of the Providence Journal. He’s had a long career, most recently as top editor at the San Jose Mercury News and overall heading news for Digital First Media, and earlier as a top editor at Media News Group, New Haven Register, and Rocky Mountain News.
He’ll work with Review-Journal’s interim leadership, after editor Mike Hengel took a buyout and made a quick exit just before Christmas. Don’t expect Butler to succeed Hengel, but his breadth of experience may well give him a major hand in picking Hengel’s successor. I’m hearing that Butler may spend most of the week in Las Vegas, and could visit again, as needed.
First published at Politico Media
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Adelson’s surprise purchase of the newspaper reverberated through the holidays in in-depth news reports, including a series of stories in The New York Times. Sunday, the New York Times’ triple-bylined Page One story (“Sheldon Adelson’s Purchase of Las Vegas Paper Seen as a Power Play,”) continued to shine a spotlight on the suddenly national tale of the Las Vegas Review-Journal buy, its staff’s clashes with management over its reporting on its own sale and questions about whether an investigation into a local judge ordered from unknown higher-ups was orchestrated by Adelson to take aim at the judge, who is presiding over a consequential lawsuit facing Adelson’s Sands casinos..
Today, as the first 2016 work week begins in earnest, we’ll see if the Adelson story regains wide prominence, or if it peters away in the welter of media news to come. Plainly, the company that sold the Review-Journal to Adelson is concerned about the former.
Executives at New Media Investment Group (or Gatehouse, its legacy name and the name by which it is still referred to in the industry, given the generic new moniker it picked) can be accurately described as “horrified” — thankfully and properly — by the many missteps involved in the Adelson sale. Company leadership’s first instinct was to hire a crisis management expert. Now it has come to realize that the problem of Las Vegas could more widely affect the view of whole company.
The company must now assert its editorial principles overall, Gatehouse management has come to believe. No longer a hodgepodge of small dailies, Gatehouse now owns more individual daily U.S. newspapers (125) than any other, albeit a roster that includes mostly smaller-circulation titles. Now, Gatehouse must recover — and that recovery demands a new scrutiny of its own. Anything less than a publicly released investigation of its journalistic missteps might fail to satisfy the industry and knowledgeable readers of its papers. At a minimum, though, this week the Review-Journal will seek to begin stabilizing itself, looking internally at what happened and why, and set out more industry-standard rules of journalistic conduct and engagement.
That scrutiny must first take on the most outrageous element of the awkward acquisition. It appears that Adelson, or his people, tried commandeer R-J investigative resources (“Las Vegas Review-Journal’s Owners Told Reporters to Monitor Judges”) to “monitor” the performance of local judges who have been thorns in Adelson’s backside. The casino magnate is involved in a civil suit. Among the allegations in that suit: his company is doing business with the Macau gambling mob.
So far, no hard evidence has surfaced of Adelson or his people directing the R-J’s new staff, but the nature, timing and oddness of the coverage (the Times’ two-word take: “ominous coincidence“) ordered from on-high leads to an inescapable conclusion: Even before the legal transfer of the paper had been inked, Adelson, with Gatehouse management help, had trampled traditional journalistic lines and convention, believing he could use journalists as a hit squad.
That’s the big question of credibility to be tackled. Further, though, the apparent Keystone Kops-like changing of newspaper’s reporting on its own sale — removing fair but pointed analysis — requires its own reckoning.
As I pointed out in December, the nature of the Las Vegas sale certainly does demand much more of our collective attention than the buying of your average 100,000-circulation paper would elicit. The apparent effort to use journalists’ work to discredit judges’ work calls to mind the kinds of pressures suffered by journalists in many parts of the world, as political power trumps journalistic standards of fairness. It recalls banana republics in which newsrooms serve owners’ agendas, not able to act on their primary responsibility to readers.
We have more than abstract concern on that point, even without the half-explained, would-be investigation of the local judges.
Sheldon Adelson isn’t just another news-making orange-haired billionaire, or one of the emerging group of U.S. billionaires who have bought papers, as at least three others recently have (though that’s a comparison his representatives are eager to advance). He’s a billionaire who spent about $100 million on Republican candidacies in 2012 and who hosted the last Republican debate at his own Sands Hotel in Las Vegas; his name is now often mentioned as one of the powerful few anointing Marco Rubio as a would-be alternative to Donald Trump and Ted Cruz for the Republican Presidential nomination.
Further, we know he overpaid massively beyond market value for the R-J. In announcing the sale that was completed on Dec. 10, New Media said its gain on the transaction would be “an estimated 69%.” By my own calculations, the R-J and its associated Nevada publications were worth about $52 million, when bought in March, 2015 by New Media Investment Group. Yet, nine months later, as the paper’s revenue only declined, Adelson paid $140 million for the properties — or almost triple the likely March value. The commonsense conclusion: This was an overtly political buy of the in-play, purple Nevada’s largest and still most influential daily.
Among those smart observers with whom I’ve talked, there’s a perverse satisfaction in believing that the ham-handedness of the whole Adelson sale affair has made it more difficult to bend the paper, and its reporting, to his own uses. The argument: the whole world is now watching. I’d like to believe that argument.
Certainly, the holiday attention — and I credit the Times for staying on the story that several of us focused on in mid-December — has raised awareness. But, what will sustain it? The media-watching press will inevitably move on to other stories. Further it will be the day-to-day, month-to-month changes in Review-Journal itself that will tell the story of influence. Let’s recall how hard it was for outside observers to truly understand how much, or how little, developer Doug Manchester’s ownership affected the news coverage of the San Diego Union-Tribune during his three-and-a-half-year tenure, which ended when Tribune Publishing bought the paper in May. Perhaps the American Society for News Editors, or a similar respected group, can provide an additional watchdog function here.
It is Gatehouse, which sold the paper to Adelson and will continue to manage it — at least for now — that must now step up.
The company has grown quickly, as hedge fund and private equity giant Fortress Investment Group has provided the firepower for cheap acquisition, after Gatehouse emerged from its December, 2013 bankruptcy. Private equity ownership of newspaper companies is in and of itself problematic, given the built-in shorter-term horizons and singular emphasis on profit maximization. In this case, though, the company owes its readers, its own journalists and the wider public a series of explanations.
While it may be constrained in what it can say publicly due to whatever confidentiality requirements are built into its sales agreement with Adelson — and let’s note how litigious Adelson has been — the company must come to grips with the mess.
Kirk Davis, COO of New Media and CEO of Gatehouse Media LLC, has been publicly quiet, though associates say he now understands the depth of the controversy. Mike Reed, New Media Investment Group’s CEO and the company’s chief acquisitor, has so far shown himself to be tone-deaf to the multiple controversies. Largely declining comment, he told the Review-Journal little. It reported its conversation this way: “He also sidestepped when asked if his company or the casino mogul had already influenced editorial decisions made by Review-Journal Publisher Jason Taylor. ‘I don’t have a comment on that,’ Reed told a reporter. ‘My recommendation is focus your energy on making the brand stronger.’”
A newspaper brand, though, is nothing without the trust of its readers or its community, and that trust has been put into question.
Considering editor Hengel’s abrupt December departure, and his warning of an adversarial relationship with its new owner, Gatehouse must move quickly to appoint a respected editor, known for journalistic integrity. Further it owes the wider community – in Las Vegas and nationally – a set of basic principles, putting in public writing the commonsense standards of fairness that drive, though unevenly, American daily journalism. Finally, it should publish a public accounting of the December mess.
Perhaps the Adelson affair is a one-off, but maybe it’s not. Given the low, low prices of American dailies and the willingness, or at least acquiescence, of companies like New Media Investment Group to sell to plainly political buyers, other Adelsons may come out of the woodwork, as I’ve detailed. As importantly, we’re now seeing the next big consolidation in the struggling newspaper industry, with Gatehouse and Gannett leading that pack.
With little fanfare, Gatehouse has grown into a consequential company, as it has bought metro papers in Providence, Columbus and Worcester within the last year or so. It’s a gawky company, and one that must now quickly mature. The company most known for centralizing efficiencies and leadership in its digital marketing services business Propel must now re-prove a belief in serving readers — not powerful interests — first.