Gannett Announces Asset Purchase Agreement With Hearst

Rhea-AI Summary

Gannett Co. (NYSE: GCI) has announced an asset purchase agreement with Hearst to sell the Austin American-Statesman from its USA TODAY Network portfolio. The Statesman, founded in 1871, is an award-winning publication that has been named Texas Newspaper of the Year three times and was a 2023 Pulitzer Prizes finalist.

The transaction is expected to close in Q1 2025, with proceeds being directed toward debt reduction. The sale is described as a strategic decision to position Gannett and its network of over 200 local publications for future growth. For Hearst, which currently publishes 26 dailies and 52 weeklies across the U.S., this acquisition aligns with their strategy to invest in thriving communities with strong potential.

Positive

• Proceeds from the sale will be used for debt reduction
• Strategic divestment to position company for future growth

Negative

• Reduction in Gannett's media portfolio with the loss of a major award-winning publication

Insights

Media Industry Financial Analyst

This strategic divestiture marks a significant step in Gannett's ongoing portfolio optimization and debt reduction strategy. The sale of the Austin American-Statesman, a prestigious publication with multiple Texas Newspaper of the Year awards and recent Pulitzer recognition, represents a high-quality asset acquisition for Hearst while providing Gannett with important debt relief.

The transaction's timing is particularly strategic, as it coincides with increasing consolidation in local media markets. Hearst's expansion to 26 dailies and 52 weeklies post-acquisition strengthens their presence in the rapidly growing Texas market, particularly in the tech-centric Austin region. This acquisition complements Hearst's existing Texas properties and creates potential operational synergies.

For Gannett, this move aligns with their debt reduction imperative while maintaining a substantial network of over 200 local publications. The decision to divest a premier asset suggests a calculated approach to balance sheet management, potentially signaling more strategic divestitures ahead. The focus on debt reduction indicates a shift toward financial sustainability over market expansion.

The deal underscores the evolving dynamics in local news markets, where scale and regional clustering are becoming increasingly important for operational efficiency. Hearst's commitment to local journalism, combined with their diversified media portfolio and strong financial position, positions them well to invest in the Statesman's digital transformation and maintain its journalistic excellence.

Hearst to acquire the Austin American-Statesman

NEW YORK, NY--(BUSINESS WIRE)-- Gannett Co., Inc. (NYSE: GCI) has entered into an asset purchase agreement with Hearst, a leading global diversified information services and media company, to divest the Austin American-Statesman from the USA TODAY Network portfolio of over 200 local publications across the country.

The award-winning Austin American-Statesman is a trusted source for exceptional journalism and a pillar in the Austin community, serving local businesses and brands with innovative strategies and solutions. Founded in 1871, the Statesman has been named Texas Newspaper of the Year three times by the Texas Associated Press Managing Editors and more recently was recognized as a 2023 Public Service Pulitzer Prizes finalist and a 2024 Edward R. Murrow Award winner.

“Hearst has a stellar reputation in the publishing industry and their values are uniquely aligned with ours,” said Michael Reed, Gannett Chairman and Chief Executive Officer. “The sale of the Austin American-Statesman from our portfolio is a strategic decision that will complement the Hearst brand while positioning Gannett and the USA TODAY Network of more than 200 local publications for future growth. We are confident Hearst will be a great home for our Statesman colleagues.”

Hearst Newspapers, the operating group responsible for Hearst’s newspapers, local digital marketing services businesses and directories, publishes 26 dailies and 52 weeklies across the U.S.

“This acquisition complements Hearst's set of newspapers and reinforces our commitment to delivering high-quality journalism,” said Jeff Johnson, president of Hearst Newspapers. “It aligns with our strategy to invest in thriving communities with strong potential. We look forward to welcoming the Austin American-Statesman team to Hearst, joining 2,300 committed Hearst Newspapers professionals across the country.”

The transaction is anticipated to close in the first quarter of 2025 and proceeds from the transaction are expected to be used for debt reduction.

ABOUT GANNETT

Gannett Co., Inc. (NYSE: GCI) is a diversified media company with expansive reach at the national and local level dedicated to empowering and enriching communities. We seek to inspire, inform, and connect audiences as a sustainable, growth focused media and digital marketing solutions company. We endeavor to deliver essential content, marketing solutions, and experiences for curated audiences, advertisers, consumers, and stakeholders by leveraging our diverse teams and suite of products to enrich the local communities and businesses we serve. Our current portfolio of trusted media brands includes the USA TODAY NETWORK, comprised of the national publication, USA TODAY, and local media organizations in the United States, and Newsquest, a wholly-owned subsidiary operating in the United Kingdom. Our digital marketing solutions brand, LocaliQ, uses innovation and software to enable small and medium-sized businesses to grow, and USA TODAY NETWORK Ventures, our events division, creates impactful consumer engagements, promotions, and races.

ABOUT HEARST

Hearst is one of the nation’s largest global, diversified information, services and media companies. Hearst has been innovating for more than a century, leading with purpose, integrity and a culture of care, with a mission to inform audiences and improve lives. The company’s diverse portfolio includes global financial services leader Fitch Group; Hearst Health, a group of medical information and services businesses; Hearst Transportation, which includes CAMP Systems International, a major provider of software-as-a-service solutions for managing maintenance of jets and helicopters; ownership in cable television networks such as A&E, HISTORY, Lifetime and ESPN; 35 television stations; 26 daily and 52 weekly newspapers; digital services businesses; and more than 200 magazine editions around the world.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, that relate to our current expectations and views of future events. All statements other than statements of historical facts contained in this press release, including statements relating to whether the transaction will enable Gannett to reduce its leverage, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. In some cases, you can identify forward-looking statements by terms such as “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “potential,” “could,” “will,” “would,” “ongoing,” “future” or the negative of these terms or other similar expressions that are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are based largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements involve known and unknown risks, uncertainties, contingencies, changes in circumstances that are difficult to predict and other important factors that may cause our actual results, performance, or achievements to be materially and/or significantly different from any future results, performance or achievements expressed or implied by the forward-looking statement. For a discussion of some of the risks and important factors that could cause actual results to differ materially from our expectations, see the risks and other factors detailed in “Item 3. Key Information - Risk Factors” in Gannett’s 2023 Annual Report on Form 10-K and Gannett’s quarterly reports on Form 10-Q and Gannett’s other filings with the SEC, in each case as such factors may be updated from time to time. Any forward-looking statements contained in this press release speak only as of the date hereof and accordingly undue reliance should not be placed on such statements. Gannett disclaims any obligation or undertaking to update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, other than to the extent required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250219811531/en/

MEDIA CONTACTS

Gannett

Lark-Marie Antón

Chief Communications Officer

(646) 906-4087

lark@gannett.com

Matt Esposito

Investor Relations

(703) 854-3000

investors@gannett.com

Hearst

Paul Luthringer

Vice President Marketing Communications

(212) 649-2540

paul@hearst.com

Source: Gannett Co., Inc.

FAQ

When will Gannett's sale of Austin American-Statesman to Hearst close?

The transaction is expected to close in the first quarter of 2025.

How will Gannett (GCI) use the proceeds from the Austin American-Statesman sale?

Gannett plans to use the proceeds from the sale for debt reduction.

What awards has the Austin American-Statesman won before Gannett's sale?

The publication has been named Texas Newspaper of the Year three times, was a 2023 Public Service Pulitzer Prizes finalist, and won a 2024 Edward R. Murrow Award.

How many publications will remain in Gannett's USA TODAY Network after the sale?

Gannett's USA TODAY Network will still maintain over 200 local publications across the country after the sale.