NEW YORK (Reuters) – Finding a buyer for Philadelphia Energy Solutions’ oil refinery has grown urgent as the bankrupt company’s funds dwindle and no signs emerge that it is winning a fight for insurance payouts after a June blaze at the plant, according to court documents and bankruptcy experts.
Without access to the more than $1 billion in insurance coverage, selling the refinery has become one of the company’s only options to raise cash before being forced to liquidate.
At least three parties have potential proposals to buy the shut Philadelphia refinery, each with plans to reopen the 1,300-acre (5.3-square km) site with a mix of oil refining and alternative energy production, sources familiar with the plans said.
Initial meetings are scheduled between the prospective buyers and a collection of vetters over the next several weeks, but it is unclear how long it would take for any official bid to come together, the sources said.
PES was not available for comment on whether it had reviewed any of the proposals or how viable it considered them to be.
For the second time in less than two years, PES filed for Chapter 11 bankruptcy on July 21, exactly a month after fire and blasts destroyed an alkylation unit at the 335,000-barrel-per-day refinery.
PES shut its final crude unit in late July, and more than 600 workers are in the process of being laid off without severance pay or the option for continued health insurance.
The company has no prepackaged arrangement to restructure the business or income from running the refinery, the largest in the U.S. Northeast, raising the likelihood it will be forced to liquidate.
“They’re playing a game against the clock,” said Christina Simeone, a senior fellow at the Kleinman Center for Energy Policy at the University of Pennsylvania, who wrote a report last year predicting the refinery would close by 2022 due to poor economics.
To emerge from bankruptcy, PES needs to tap into $1.25 billion in property damage and loss of business insurance coverage, according to court filings. So far, PES has been denied requests for payment, and at least one creditor has surfaced to fight for any future insurance proceeds. Seven others are objecting to PES’ bankruptcy plan.
It is unclear how much is left of the initial $65 million bankruptcy loan PES secured at the start of the process, which is needed to pay for attorneys, wind down the massive refinery complex, utility bills and salaries.
PES recently asked the court to retain law firm Kirkland and Ellis for $4.6 million and another firm for $1 million, according to court documents.
On Friday, the U.S. Trustee appointed to the bankruptcy case objected to Kirkland and Ellis, saying the firm has represented PES’s largest equity holders in unrelated matters, creating a potential conflict of interest, court documents show.
“Given the incident which precipitated the filing of this Chapter 11 proceeding, there is a strong likelihood that the assets of the debtor will be liquidated rather than reorganized,” the trustee wrote in court documents.
PES hired investment bank PJT Partners about two weeks ago to market the site. PJT declined to comment on its efforts to find a buyer.
Companies in Chapter 11 bankruptcies generally face two scenarios when attempting to sell assets, said Eric Snyder, a bankruptcy expert and partner at New York-based law firm Wilk Auslander, who is not working on PES’ case.
With the luxury of time, companies can enter into an agreement with a single bidder to be decided on by a bankruptcy court judge. Or, they can hold a bare auction, opening up the sale to all qualified bidders for a set period of time.
If no deal comes together before the company runs out of money, it could be forced to start Chapter 7 liquidation, Snyder said. Chapter 11 is a generally better outcome for creditors, as assets tend to fall in value during liquidation, which would leave them with less chance to collect on what they are owed.
“It’s in the creditors’ best interest to try to make it through Chapter 11, but for people interested in the PES site for future uses, it’s far better for it to go to Chapter 7,” the Kleinman Center’s Simeone said.
Reporting by Laila Kearney; Editing by Marguerita Choy and Tom Brown
The Trump administration’s proposal would significantly weaken former President Barack Obama’s auto-emissions standards. CreditCreditJustin Sullivan/Getty Images
Toyota, Fiat Chrysler and General Motors were all summoned by a senior Trump adviser to a White House meeting last month where he pressed them to stand by the president’s own initiative, according to four people familiar with the talks.
But even as the White House was working to do this, it was losing ground. Yet another company, Mercedes-Benz, is preparing to join the California agreement, according to two people familiar with the German company’s plans.
Mr. Trump, described by three people as “enraged” by California’s deal, has also demanded that his staffers step up the pace to complete his plan. His proposal, however, is directly at odds with the wishes of many automakers, which fear that the aggressive rollbacks will spark a legal battle between California and the federal government that could split the United States car markets.
The administration’s efforts to weaken the Obama-era pollution rules could be rendered irrelevant if too many automakers join California in opposition before the Trump plan can be put into effect. That could imperil one of Mr. Trump’s most far-reaching rollbacks of climate-change policies.
In addition to Mercedes-Benz, a sixth prominent automaker — one of the three summoned last month to the White House — intends to disregard the Trump proposal and stick to the current, stricter federal emissions standards for at least the next four years, according to executives at the company.
Together, the six manufacturers who so far plan not to adhere to the new Trump rules account for more than 40 percent of all cars sold in the United States.
“You get to a point where, if enough companies are with California, then what the Trump administration is doing is moot,” said Alan Krupnick, an economist with Resources for the Future, a nonpartisan energy and environment research organization.
A senior administration official said the California pact was an effort to force Americans to buy expensive vehicles that they don’t want or need. Speaking on condition of anonymity, he called the pact top-down policymaking with California trying to impose its standard on 49 other states.
The Trump administration’s proposal would significantly weaken the 2012 vehicle pollution standards put in place by President Barack Obama, which remain the single largest policy enacted by the United States to reduce planet-warming carbon dioxide emissions. The Obama-era rules require automakers to nearly double the average fuel economy of new cars and trucks to 54.5 miles per gallon by 2025, cutting carbon dioxide pollution by about six billion tons over the lifetime of all the cars affected by the regulations, about the same amount the United States produces in a year.
Carbon dioxide in the atmosphere traps the sun’s heat and is a major contributor to climate change.
Mr. Trump has billed his plan, which would freeze the standards at about 37 miles per gallon, as a deregulatory win for automakers that will keep down car prices for American consumers. Mr. Trump’s plan would also revoke the legal authority of California and other states to impose their own emissions standards.
In an extraordinary move, automakers have balked at Mr. Trump’s proposal, mainly because California and 13 other states plan to continue enforcing their current, stricter rules, and to sue the Trump administration. That could lead to a nightmare situation for automakers: Years of regulatory uncertainty and a United States auto market that effectively split in two.
Last week, California officials said that they expected more automakers to join their pact, which commits carmakers to build vehicles to a standard nearly as strict as the Obama-era rules that the president would like to weaken. “Many companies have told us — more than one or two — that they would sign up the agreement as soon as they felt free to do so,” said Mary Nichols, the top clean air official in California.
Mary Nichols of the California Air Resources Board in 2018.CreditDavid Paul Morris/Bloomberg
Officials from Mercedes-Benz declined to comment.
Executives from the three auto companies summoned to the White House declined to comment publicly on their interactions with the Trump administration. But at a recent media event, Mike Manley, Fiat Chrysler’s chief executive, said of the California pact: “We are absolutely going to have a look at it and see what it means.”
In the Trump administration, three senior political officials working on the rollback, a complex legal and scientific process, have all left the administration recently. A senior career official with years of experience on vehicle pollution policy was transferred to another office.
Atlantic City | Aug 19, 2019 — Over 240 offshore wind energy supporters attended Time for Turbines III at the Stockton University Atlantic City campus on Friday.
“We have the resources and capacity to be the national frontrunner in the offshore wind industry,” state Senate President Steve Sweeney (D-West Deptford) said at the event. “As the renewable energy sector of the economy grows, we have an obligation not only to our environment but to New Jersey workers to make it a priority.”
Jersey Renews, a coalition of labor, community and environmental organizations, and Maryland-based nonprofit the Business Network for Offshore Wind partnered for the event and what they called a day full of information-sharing and networking to support the development of a just and sustainable offshore wind industry in the state.
“Given the impacts and urgency of climate change that we are facing on the shoreline, it is inspiring to see all of the ways that state government and the offshore wind industry are working together to bring utility-scale clean energy to ratepayers as soon as possible,” said Liz Burdock, executive director, Business Network for Offshore Wind.
Gov. Phil Murphy announced his signing of Executive Order No. 79 establishing the New Jersey WIND Institute from a video recording at the event before offshore wind developers, state officials, labor leaders and environmentalists delivered presentations on the industry’s progress in the last year and future developments.
“The broad coalition of stakeholders here today from New Jersey’s business, labor and environmental communities underscores the importance of the offshore wind industry to our state,” U.S. Sen. Cory Booker (D-N.J.) said.
State Board of Public Utilities President Joseph Fiordaliso spoke about the BPU’s Energy Master Plan and Offshore Wind Strategic Plan as ongoing projects.
“As the serious impacts of the climate crisis are arriving much more quickly than anticipated, it is imperative to do all we can to mitigate those effects,” he said.
“New Jersey is poised to become the nation’s leader in offshore wind generation,” BPU Commissioner Bob Gordon said. “Not only will the state reap the benefits of clean, reliable and renewable power, but we will create a whole new industry that will produce thousands of high-skilled jobs, rebuild our manufacturing sector and revitalize our ports.”
Another top panel at the event consisted of the offshore wind developers, including Denmark-based Ørsted, Atlantic City-based offshore wind firm Atlantic Shores Offshore Wind and Norway-based energy company Equinor.
“The economic benefits and supply chain opportunities that come as part of this new industry will have long-lasting effects throughout the region and the country,” said Lauren Burm, head of public affairs and communications, Ørsted North America.
A green transportation panel in the afternoon, chaired by Doug O’Malley, director of Environment New Jersey, talked again about the state’s potential in the offshore wind industry.
“New Jersey has a clean energy gold mine of offshore wind right off the Jersey Shore, and we are on the cusp of tapping this renewable energy to power our state and region,” O’Malley said.
The event also received major organizational support from Environment New Jersey, the New Jersey Work Environment Council, Stockton University and the Energy Foundation.
Jeffrey Epstein’s globe-trotting life of luxury and alleged sex trafficking traveled through a convenient hub for the wealthy: Teterboro Airport. From his mansion in Manhattan to his ranch in New Mexico and his island in the Caribbean, Epstein allegedly used his fleet of private jets to deliver dozens of sex slaves — some as young as 14 — to celebrities, royals and famous politicians, according to statements made in criminal and civil court filings since 2008, some of which were first released to the public last week.
The heart of Epstein’s global transportation network was a corporate airport carved from a New Jersey swamp. His planes, which ranged from a Cessna to a Gulf Stream jet to a Boeing 727, recorded at least 730 flights to and from Teterboro between 1995 and 2013, according to flight logs contained in documents unsealed last week by a federal court in a lawsuit brought by one of Epstein’s alleged victims against one of his close associates.
This represents roughly a third of all flights, more than any other airport recorded in the logs.
Epstein, who made his money as a financier, was arrested on July 6 at Teterboro Airport after flying from Paris. He was charged with two counts of sex trafficking. In the indictment, the U.S. Attorney’s Office for the Southern District of New York said Epstein and his employees operated a sex trafficking network that transported dozens of girls between his homes in Palm Beach, Florida, and Manhattan.
Jeffrey Epstein was arrested on July 6 at Teterboro Airport in New Jersey after flying from Paris. (Photo: Tariq Zehawi/NorthJersey.com)
“Let me assure you that this case will continue on against anyone who was complicit with Epstein,” Barr said at a press conference.
If that investigation moves forward, flight logs from Epstein’s planes may prove to be an essential piece of evidence. The logs are voluminous, spanning thousands of flights between 1995 and 2013.
The logs were kept by David Rodgers, just one of at least six pilots employed by Epstein at various times, court documents show.Get the News Alerts newsletter in your inbox.
The other pilots included Lawrence Visoski, Bill Hammond, Pete Rathgeb, Gary Roxburgh and Bill Murphy, according to a statement of facts filed by Virginia Roberts Giuffre in her 2015 lawsuit against Epstein associate Ghislaine Maxwell. In that suit, Giuffre alleges Epstein lent her out as a minor for sex with his friends.
Logs from the other pilots have not surfaced in court records. Rodgers and Visoski were subpoenaed by federal prosecutors in Manhattan shortly after Epstein’s arrest in July, The New York Times reported, and both pilots have cooperated with the investigation.
Attempts to reach Rodgers for comment were unsuccessful.
Epstein and his associates also allegedly booked some of his sex trafficking victims on commercial flights, according to statements in court documents.
The logs, all 106 pages of which are written in Rodgers’ blocky handwriting, mirror the ups and downs of Epstein’s professional and personal life. According to statements made in state and federal court documents, they also show the names and initials of Epstein’s victims, and of the people he allegedly employed to help operate his sex trafficking network.
The logs record 322 flights between Teterboro and Palm Beach, the site of Epstein’s waterfront mansion. This is where Epstein recruited dozens of girls to provide him and his associates with massages and sex, according to claims made in documents from a local police investigation that were recently unsealed in federal court.
Rodgers flew Epstein’s planes another 112 times between Teterboro and the U.S. Virgin Islands, where Epstein owned a 78-acre island with a mansion and two swimming pools, the flight logs show. It was there on a beach in 2001 that Johanna Sjoberg and Virginia Roberts performed massages and sex with Epstein, according to a court deposition by Sjoberg, who was 21 at the time.
Roberts was 17. She flew to and from Teterboro on Epstein’s jet eight times starting when she was 16, according to the logs. In the Caribbean, workers at the airport in St. Thomas were disgusted to see Epstein, by then a man in his late 40s, flying with so many underage girls, according to interviews published by Vanity Fair magazine.
Teterboro Airport
Teterboro Airport sits in the floodplain of the Hackensack River, 12 miles west of Manhattan. It is a popular destination for corporate jets, which often ferry wealthy business executives and celebrities to and from New York City.
It operates as a reliever airport, removing smaller and slower aircraft from the congested flight paths of the region’s three large commercial airports — LaGuardia, JFK and Newark Liberty. Most flights at Teterboro are coordinated by five fixed-base operators, private companies that operate as one-stop shops for wealthy plane owners. These operators handle everything from aircraft maintenance and fueling to baggage handling and hotel reservations for passengers.
All workers at Teterboro Airport receive training to report suspicious activity to law enforcement, said Cheryl Ann Albiez, a spokesperson for the Port Authority of New York and New Jersey, which owns the airport. Members of the Port Authority Police Department patrol the airport, Albiez said, and are instructed to report matters, including sex trafficking, to the FBI.
“Teterboro is really an airport for the rich and famous,” said Taina Bien-Aimé, executive director of the New York-based Coalition Against Trafficking in Women. “The customers there are very privileged, and can pull strings that can lead to confidentiality.”
The flight logs unsealed by a federal court judge last Friday list 82 trips to and from Teterboro by Sarah Kellen and 48 trips by Nadia Marcinkova. According to a 2008 plea agreement in an earlier sex trafficking case in Florida — which reduced Epstein’s punishment from a potential life sentence to 13 months in jail — Kellen and Marcinkova were identified as “potential co-conspirators.”
Epstein’s planes ferried underage girls from Teterboro to his various homes, according to allegations in court documents. Epstein’s planes also flew direct from Teterboro to Paris, London, Ireland and Aspen, Colorado, according to the flight logs. Prominent people listed in the logs as flying through Teterboro on Epstein’s planes included Bill Gates and Alberto Pinto, a famous interior designer.
Another person who appears in the logs is Alan Dershowitz, a famous lawyer who helped lead Epstein’s legal defense team against sex trafficking charges in 2007. Dershowitz was listed as flying through Teterboro on Epstein’s planes seven times, according to the logs. The trips included one flight on Feb. 5, 2004, in which the logs indicate Dershowitz flew from Teterboro to Palm Beach accompanied by Epstein and Kellen.
Virginia Giuffre has claimed in various legal actions, including one as recent as April 2019, that Epstein forced her to have underage sex with several of his associates, including Dershowitz.
Rodgers’ flight logs do not indicate that Dershowitz and Giuffre were ever on the same flight.
Dershowitz has aggressively denied Giuffre’s allegations, calling her a liar. Giuffre responded by suing Dershowitz for defamation.
In that complaint, Giuffre claims she was “regularly abused by Epstein and was lent out by Epstein to others for sexual purposes.”
“Dershowitz was also a participant in sex trafficking, including as one of the men to whom Epstein lent out Plaintiff for sex,” according to the complaint filed with the U.S. District Court in the Southern District of New York.
Oral arguments in the defamation case are scheduled for next month. Dershowitz has filed a motion to dismiss.
Lolita Express
Another person who appears hundreds of times in the flight logs is Ghislaine Maxwell, a close friend of Epstein.
In depositions related to Giuffre’s civil lawsuit against Maxwell, which were recently unsealed by a federal court judge in Manhattan, several women alleged that Maxwell served as a recruiter and manager of Epstein’s network of underage girls. Maxwell has vigorously denied the allegations, and she has never been charged with a crime.
Giuffre’s case against Maxwell settled in 2017.
According to the flight logs, Maxwell flew hundreds of times on Epstein’s Boeing 727, a former commercial airliner coined the Lolita Express by news tabloids, a nickname based on Vladimir Nobokov’s novel about a middle-aged professor who repeatedly rapes a 12-year-old-girl.
The plane is registered with the FAA using a tail number that ends in Epstein’s initials, JE. Other planes that appear in Rodgers’ logs include a twin-engine Cessna with a tail number ending in Maxwell’s initials, GM. Both planes spent days on the tarmac at Teterboro when not in flight, according to the logs.
The logs also appear to document changes in Epstein’s business and social standing.
Beginning in 1995 and continuing for several years, Epstein flew regularly to Columbus, Ohio, home to billionaire executive Leslie Wexner. Wexner founded L Brands, a company that owns retail chains including Victoria’s Secret and Bath & Body Works.
Over time the two men grew so close that Wexner gave Epstein power of attorney over his personal finances, with broad authority to invest and borrow money on Wexner’s behalf. Those details were included in an Aug. 8 letter from Wexner to members of the Wexner Foundation, a charity he controls. The letter, which attempts to explain Wexner’s relationship with Epstein, was also sent to news organizations.
According to the letter, Wexner cut ties with Epstein in 2007, as Epstein prepared to defend himself against charges of trafficking young girls in Florida.
Internal documents show how the company worked to discredit critics and investigated singer Neil Young
Monsanto adopted a multi-pronged strategy to target Carey Gillam, a Reuters journalist who investigated the company’s weedkiller.
Sam Levin reports for the Guardian
Monsanto operated a “fusion center” to monitor and discredit journalists and activists, and targeted a reporter who wrote a critical book on the company, documents reveal. The agrochemical corporation also investigated the singer Neil Young and wrote an internal memo on his social media activity and music.
The records reviewed by the Guardian show Monsanto adopted a multi-pronged strategy to target Carey Gillam, a Reuters journalist who investigated the company’s weedkiller and its links to cancer. Monsanto, now owned by the German pharmaceutical corporation Bayer, also monitored a not-for-profit food research organization through its “intelligence fusion center”, a term that the FBI and other law enforcement agencies use for operations focused on surveillance and terrorism.
The documents, mostly from 2015 to 2017, were disclosed as part of an ongoing court battle on the health hazards of the company’s Roundup weedkiller. They show:
Monsanto planned a series of “actions” to attack a book authored by Gillam prior to its release, including writing “talking points” for “third parties” to criticize the book and directing “industry and farmer customers” on how to post negative reviews.
Monsanto paid Google to promote search results for “Monsanto Glyphosate Carey Gillam” that criticized her work. Monsanto PR staff also internally discussed placing sustained pressure on Reuters, saying they “continue to push back on [Gillam’s] editors very strongly every chance we get”, and that they were hoping “she gets reassigned”.
Monsanto “fusion center” officials wrote a lengthy report about singer Neil Young’s anti-Monsanto advocacy, monitoring his impact on social media, and at one point considering “legal action”. The fusion center also monitored US Right to Know (USRTK), a not-for-profit, producing weekly reports on the organization’s online activity.
Monsanto officials were repeatedly worried about the release of documents on their financial relationships with scientists that could support the allegations they were “covering up unflattering research”.
The internal communications add fuel to the ongoing claims in court that Monsanto has “bullied” critics and scientists and worked to conceal the dangers of glyphosate, the world’s most widely used herbicide. In the last year, two US juries have ruled that Monsanto was liable for plaintiffs’non-Hodgkin lymphoma (NHL), a blood cancer, and ordered the corporation to pay significant sums to cancer patients. Bayer has continued to assert that glyphosate is safe.
“I’ve always known that Monsanto didn’t like my work … and worked to pressure editors and silence me,” Gillam, who is also a Guardian contributor and now USRTK’s research director, said in an interview. “But I never imagined a multi-billion dollar company would actually spend so much time and energy and personnel on me. It’s astonishing.”
Carey Gillam interviews Dewayne “Lee” Johnson, the first cancer patient to beat Monsanto in court in Vallejo, California, September 2018. Photograph: Araceli Johnson
Gillam, author of the 2017 book, Whitewash: The Story of a Weed Killer, Cancer, and the Corruption of Science, said the records were “just one more example of how the company works behind the scenes to try to manipulate what the public knows about its products and practices”.
Monsanto had a “Carey Gillam Book” spreadsheet, with more than 20 actions dedicated to opposing her book before its publication, including working to “Engage Pro-Science Third Parties” in criticisms, and partnering with “SEO experts” (search engine optimization), to spread its attacks. The company’s marketing strategy involved labeling Gillam and other critics as “anti-glyphosate activists and pro-organic capitalist organizations”.
Gillam, who worked at the international news agency Reuters for 17 years, told the Guardian that a flurry of negative reviews appeared on Amazon just after the official publication of Whitewash, many seeming to repeat nearly identical talking points.
“This is my first book. It’s just been released. It’s got glowing reviews from professional book reviewers,” she said. But on Amazon, “They were saying horrible things about me … It was very upsetting but I knew it was fake and it was engineered by the industry. But I don’t know that other people knew that.”Advertisement
A Bayer spokesman, Christopher Loder, declined to comment on specific documents or the fusion center, but said in a statement to the Guardian that the records show “that Monsanto’s activities were intended to ensure there was a fair, accurate and science-based dialogue about the company and its products in response to significant misinformation, including steps to respond to the publication of a book written by an individual who is a frequent critic of pesticides and GMOs”.
He said the documents were “cherry-picked by plaintiffs’ lawyers and their surrogates” and did not contradict existing science supporting the continued use of glyphosate, adding, “We take the safety of our products and our reputation very seriously and work to ensure that everyone … has accurate and balanced information.”
(A Reuters spokesperson said the agency “has covered Monsanto independently, fairly and robustly”, adding, “We stand by our reporting.”)
‘They saw us as a threat’
The internal records don’t offer significant detail on the activities or scope of the fusion center, but show that the “intelligence” operations were involved in monitoring Gillam and others. An official with the title “Monsanto Corporate Engagement, Fusion Center” provided detailed analyses on tweets related to Gillam’s work in 2016.
The fusion center also produced detailed graphs on the Twitter activity of Neil Young, who released an album in 2015 called the Monsanto Years. The center “evaluated the lyrics on his album to develop a list of 20+ potential topics he may target” and created a plan to “proactively produce content and response preparedness”, a Monsanto official wrote in 2015, adding it was “closely monitoring discussions” about a concert featuring Young, Willie Nelson, John Mellencamp, and Dave Matthews.
Monsanto ‘fusion center’ officials wrote lengthy reports about singer Neil Young’s anti-Monsanto advocacy. Photograph: Dan Steinberg/REX/Shutterstock
“We have reached out to the legal team and are keeping them informed of Neil’s activities in case any legal action is appropriate,” the email said.
A LinkedIn page for someone who said he was a manager of “global intelligence and investigations” for Monsanto said he established an “internal Intelligence Fusion Center” and managed a “team responsible for the collection and analysis of criminal, activist/extremist, geo-political and terrorist activities affecting company operations across 160 countries”. He said he created Monsanto’s “insider threats program”, leading analysts who collaborated “in real-time on physical, cyber and reputational risk”.
A GateHouse Media-owned Palm Beach Post and the Gannett Co. owned USA Today. (Joe Raedle/Getty Images)
By Margaret Sullivan, Media columnist, Washington Post August 16 at 11:33 AM
For a local journalist, having your newspaper snapped up by the Gannett chain never was a joyful prospect.
Although journalistically respectable — and sometimes excellent — the Virginia-based company was known for its lean newsroom staffs and its emphasis on high-profit margins.
But times have changed. As it turns out, there are worse fates.
The recently announced $1.4 billion merger with another giant newspaper chain, GateHouse Media, is not good news for journalists at Gannett’s nationally circulated flagship, USA Today, or its prominent regional papers including the Detroit Free Press, the Indianapolis Star, the Des Moines Register, the Milwaukee Journal Sentinel and the Arizona Republic.
GateHouse’s approach to its newspapers in recent years has made Gannett look almost munificent by contrast. And although Gannett’s name will be attached to the new company, GateHouse’s business practices seem more likely to prevail.
The merger, if it happens, means even deeper cost-cutting in newsrooms that are already hollowed out.
“There is no more real newspaper in the city of Worcester,” Mayor Joseph Petty told Massachusetts radio show Talk of the Commonwealth recently after the Telegram — owned by GateHouse — abruptly laid off its veteran columnist, Clive McFarlane, among others, in yet another round of job eliminations.
McFarlane, on Facebook, blasted “the indignity of corporate management.”
“After 26 years writing for this community, I was unceremoniously shown the door today by Gatehouse, deprived even of the long-established protocol of allowing a columnist to bid farewell to his readers,” he wrote, according to Politico’s Massachusetts Playbook.
None of this is positive news for local journalism writ large, which is in an existential crisis. (The local newspaper business, in the blunt assessment of investor Warren Buffett, is “toast.”)
It’s a crisis that threatens American democracy. Local newspapers, despite all their flaws and limitations, have been a trusted — and necessary — source of information for citizens across the country.
When local news withers, bad things happen, studies show.
People vote less, and they vote in a more politically polarized way. Political corruption has more opportunity to flourish, unnoticed by the local watchdog. And municipal costs may rise.
More than 2,000 newspapers have gone out of business in the past 15 years, according to the University of North Carolina’s Penny Muse Abernathy, the leading expert on so-called “news deserts” that result.
Most are weeklies, but many metro dailies are in real trouble, too. The Vindicator, in Youngstown, Ohio, will shut down this month, leaving a substantial city without a daily paper.
Assuming that Gannett and New York-based GateHouse achieve their merger, the new company will control one of every six remaining newspapers in America, with dailies and weeklies across almost every state.
“This current deal is far from ideal for either company, or its shareholders, or its employees, or its readers,” wrote Ken Doctor, who has been tracking the machinations closely, in Nieman Lab. (He noted recently that there is a renewed chance the deal, which has had its ups and downs, won’t go through as had been announced earlier this month.)
For those last two groups — employees and readers — one of the most troubling aspects is an ambitious-sounding number associated with the merger: $300 million. That’s the amount of cost-savings that top executives want to achieve.
Not just one time, but annually.
In the newspaper world, there aren’t many ways to save that kind of money, though one hears promises about “cost synergies” and “digital transformation” and “economies of scale.”
Well, maybe.
But the cost-slashing measure that seems to spring most readily to mind is reducing head count: Cutting employees, including journalists.
Like that popular Worcester columnist. Or government reporters. Or an entire copy desk. Or any of the people who make a local paper worth reading and worth subscribing to.
The decline of local news is getting serious attention these days. Nonprofits are springing up or offering help. Foundations are providing research and funding.
Facebook and Google which together suck up the vast majority of digital advertising dollars, are pitching in with money and resources.
But the crisis continues apace. Papers close, merge, shrink. Many have become shells of their once-robust selves, inspiring the coinage “ghost newspapers.”
