Wednesday brought news that was somehow surprising but not a shock at the same time. The Pittsburgh Post-Gazette announced that it will cease operations on May 3.
Block Communications Inc., a family-owned multimedia company based in Toledo, Ohio, has owned the Post-Gazette since 1927. The Pittsburgh Gazette, which is what the paper was initially called, was first published in 1786.
In a statement, the Post-Gazette said, “Over the past 20 years, Block Communications has lost more than $350 million in cash operating the Post-Gazette. Despite those efforts, the realities facing local journalism make continued cash losses at this scale no longer sustainable.”
Just a week ago, the Pittsburgh City Paper shut down after 34 years. That, too, was owned by Block.
As far as the Post-Gazette is concerned, there’s a little more at play.
My colleague, Angela Fu, writes, “The announcement came just hours after the Supreme Court denied the company’s request to pause a lower court order requiring the company to reinstate an old health care plan for its union employees. In March, the U.S. 3rd Circuit Court of Appeals ordered the Post-Gazette to restore the plan from its old 2014-17 union contract, which the company had suspended in 2020 after declaring an impasse in contract negotiations.”
In a statement, Andrew Goldstein, president of the Newspaper Guild of Pittsburgh, said, “Instead of simply following the law, the owners chose to punish local journalists and the city of Pittsburgh. Post-Gazette journalists have done award-winning work for decades and we’re going to pursue all options to make sure that Pittsburgh continues to have the caliber of journalism it deserves.”
Poynter president Neil Brown put out a statement that said, in part, “This is tragic for those who live in the communities of Pittsburgh and who should be able to have numerous independent, useful sources of local information, news and opinions. It’s a tragedy for the journalists who, amid an almost unthinkable labor feud, have been thwarted from providing service to the people of Pittsburgh. Be it strong editorial writing, coverage of the Steelers and the Pirates or the incredible Pulitzer-winning coverage of the horrible mass shooting at the Tree of Life synagogue, the Post-Gazette has been an essential part of the fabric of Pittsburgh.”
It’s a sad day, not only for the fine journalists of the Post-Gazette, but for the people of Pittsburgh and the surrounding area. As Fu noted in her story, “The Post-Gazette is Pittsburgh’s largest newspaper. Smaller outlets exist, like the online nonprofit Public Source and an Axios Pittsburgh newsletter, but the Post-Gazette is the city’s last remaining print daily (though it only prints twice a week). The city’s other daily, the Tribune-Review, eliminated its print edition in 2016 and only publishes online. Its editorial staff is less than half the size of the Post-Gazette’s roughly 150-person newsroom.”
Check out Brown’s full statement, as well as Fu’s story, for more details on this grim development.
And here’s Pittsburgh Magazine with “The Internet Reacts to the Closing of the Pittsburgh Post-Gazette.”
Thanks, but no thanks
As expected, Warner Bros. Discovery once again advised shareholders to turn down an offer to be acquired by Paramount. For now, WBD appears to be sticking with its agreement to be bought by Netflix.
WBD agreed last month to be sold to Netflix, but Paramount mounted a hostile takeover bid, trying to convince WBD shareholders that it could offer a better deal. Initially rebuffed by WBD, Paramount bolstered its offer with several changes, including billionaire Larry Ellison, the father of Paramount CEO David Ellison, personally guaranteeing to backstop the deal.
But it wasn’t enough to persuade WBD’s board.
Essentially, the board is saying the Netflix deal is less risky.
The New York Times’ Lauren Hirsch reported, “The Warner board said Wednesday that it had lingering concerns about Paramount’s bid. Paramount, which has a market capitalization of around $13 billion, has said it plans to use about $54 billion in debt for the deal. It has also corralled billions from Middle Eastern sovereign wealth funds. Paramount has a credit rating a notch above junk level, whereas Netflix’s is investment grade.”
The board wrote, “This aggressive transaction structure poses materially more risk for WBD and its shareholders” than Netflix’s mostly cash offer.
Axios’ Sara Fischer noted, “WBD's board didn't mention Ellison's backstop guarantee in its letter to shareholders, but cited an ‘extraordinary amount of debt financing’ — and the uncertainty around it — as well as other offer terms that made it concerned about Paramount's ability to close the deal.”
This latest news doesn’t mean that everything is now settled. It’s another setback in Paramount’s desire to purchase WBD. But it likely won’t be the last time Paramount makes a run at WBD.
Netflix, however, was obviously happy with Wednesday’s developments. Co-CEOs Ted Sarandos and Greg Peters said, “The WBD Board remains fully supportive of and continues to recommend Netflix's merger agreement, recognizing it as the superior proposal that will deliver the greatest value to its stockholders, as well as consumers, creators and the broader entertainment industry.”
The Pentagon’s punchless press