Projo parent reports $9.4M quarterly loss, pays $23M in dividends

THE PARENT COMPANY of The Providence Journal reported a $9.4 million loss in the first quarter. / PBN FILE PHOTO/BRIAN MCDONALD
THE PARENT COMPANY of The Providence Journal reported a $9.4 million loss in the first quarter. / PBN FILE PHOTO/BRIAN MCDONALD

PROVIDENCE – New Media Investment Group Inc. reported Thursday a loss of $9.4 million, or 38 cents per diluted share, in the first quarter of 2019.

New Media is the parent organization of Gatehouse Media Inc., which itself is the parent company of The Providence Journal.

The company owns and operates several local publications through GateHouse Media, including the Journal, Newport Daily News, Fall River Herald News, Taunton Daily Gazette and the New Bedford Standard-Times.

The company’s revenue increased 13.7% year over year in the first quarter to $387.6 million. Same-store sales declined 7.4% year over year to $314.5 million.

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For the same time period, the company paid $23.2 million in dividends. New Media also said that it had undertaken internal initiatives to improve long-term revenue growth opportunities and profitability. The company reported $4.1 million in integration and reorganization costs in the quarter, an increase from $2.4 million of such costs one year earlier.

The company’s pension and post retirement benefits expenses for the quarter declined 25.2% year over year to $276,000.

The company is known for acquiring publications and laying off workers, although the company is not the only large investment group engaging in this practice in the United States.

The company said that circulation revenue declined 5.5% on a same-store basis, which it attributed to a shift away from a practice of pricing increases in an effort to increase subscriber bases. (The company continues to shorten subscriber’s subscriptions by charging for special inserts.) The company credited the halt in its price increase strategy for an increase in total subscribers. Those figures were not reported, although the company did say that digital-only subscribers grew 43.9% to 174,000.

“Traditional” print advertising revenue declined 14.8% on a same-store basis, consistent, the company said, with the fourth quarter of 2018. Commercial print, distribution and events revenue grew 1.4% on a same-store basis.

The company also said that it had completed a $30 million acquisition of the publishing arm of Schurz Communications, which included 20 regional papers and several special publications in Indiana, Maryland, Michigan, Pennsylvania and South Dakota. Overall, acquisitions cost the company $38 million for the quarter, compared with $29.4 million in the first quarter of 2018.

The company has said that as of the end of December, it published 146 daily newspapers and 331 community publications. Numbers that include first-quarter acquisitions were not immediately available. According to the annual reports of New Media, the Providence Journal had an average daily circulation of 85,323 in 2015. That number declined to 76,671 in the 2016 report, then to 55,344 in 2017 and 47,313 in 2018.

For all of 2018, the company reported a profit of $18.2 million. The organization paid $90.1 million in dividends that year, amid layoffs across many of its publications.

New Media Investment Group is overseen by Fortress Investment Group LLC. In 2018, the company New Media paid a combined $24.3 million to Fortress, including $10.7 million in management fees, $11.1 million in incentive compensation and $2.5 million of expense reimbursement.

In a 2018 year-end report, New Media said that Blackrock Inc. owned 14.7% of the company, The Vanguard Group Inc. owned 10%, Dimensional Fund Advisors LP owned 7.4%, Franklin Mutual Advisers LLC owned 5.3% and Leon G. Cooperman owned 4.2%. Directors, nominees and executive officers for the company owned a combined 1.8% of the company at that time. Fortress and its affiliates also owned approximately 1.1% of the company at the end of 2018.

Chris Bergenheim is the PBN web editor. You may reach him at

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