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Peoria Pundit: GateHouse slashes and burns, manages to lose only $13 million

GateHouse Media — owner of the Peoria Journal Star and a slew of other local and non-local papers —  managed to cut costs to help offset declining revenue, but still managed a net loss of more than $13 million, according to its first quarter report.

CEO Michael Reed said a key factor in the company’s results was its focus on cutting costs.

“While I am excited about our recent revenue performance, we remain focused on expense controls,” Reed said in a statement. “We continue to identify and execute on permanent cost reductions, as evidenced by our 4.4 percent reduction in expenses.”

Going forward the company will continue to invest in its new digitally driven business model, Reed said. GateHouse launched several products during the first quarter, including, an online marketing company that provides digital products and services to businesses, and Find n Save, a newspaper industry online-shopping platform.

MY TWO CENTS: One of the things they managed to do was to avoid signing a contract with unionized employees at the Peoria Journal Star. And they managed to arrange for $1.4 million in bonuses to top bosses in 2011. And that doesn’t include the pre-arranged severance packages (about two years worth of salary and bonuses) they will get in 2014 when they lose their jobs when a $1.2 billion (that’s BILLION with a “B”) in debt comes due. Not to mention that all these cuts are decimating reporting staffs.

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