An eleventh-hour buyer for the Pittsburgh Post-Gazette emerged Tuesday, two weeks before its planned shutdown, but the prospective owners signaled that the surviving operation will be smaller and staff cuts could be expected.
The buyer – nonprofit Venetoulis Institute for Local Journalism, owner of The Baltimore Banner – said it agreed to acquire the assets of the Post-Gazette, which had been expected to shut down its website and stop printing its paper on May 3.
The reversal comes after months of uncertainty surrounding the 240-year-old paper’s future. Owners announced the closure after a lengthy, bitter strike and failed attempts by the Post-Gazette to convince the U.S. Supreme Court to halt a lower court order that required the company to make changes to its health insurance coverage for union workers.
“We are committed to working with exceptional journalists, along with civic and business leaders across the region, to build a new future for local journalism in Western Pennsylvania,” Bob Cohn, president and CEO of the Venetoulis Institute, said in a news release.
Newspaper Guild of Pittsburgh President Andrew Goldstein said the sale was “definitely good news” but many questions remained unanswered.
“It’s pretty clear to us that they [the Venetoulis Institute] are saying the Post-Gazette in its current form isn’t sustainable,” Goldstein said.
Goldstein said some of the language in the announcement was a “nice way” of talking about job cuts.
The Post-Gazette reported Tuesday that its newsroom stands at about 100 employees. The new version of the organization might begin with a smaller staff, Venetoulis Chairman Stewart Bainum Jr. told the Post-Gazette.
He said the Post-Gazette’s current business model can’t sustain a newsroom of its present size and will need to be addressed carefully, the newspaper reported.
In January, Block Communications, which has owned the Post-Gazette since 1927, pointed to ongoing financial losses, labor disputes and a shrinking local news market when it announced plans to close.
The deal, approved by both organizations’ boards, is expected to become official on May 4, according to Block Communications. The Post-Gazette name will remain, the Venetoulis Institute said. Terms of the transaction were not disclosed.
Allan Block, chairman and CEO of Block Communications, declined to comment on Tuesday.
What is an asset sale?
The Baltimore Banner reported that the Venetoulis Institute is buying only the assets of the paper, and it is not required to assume the contracts of Block Communications.
An asset sale is when the buyer purchases selected business assets and may assume certain liabilities. According to Pittsburgh law firm Jones, Gregg, Creehan & Gerace, the asset sale structure often appeals to buyers because it limits exposure to past obligations. This is unlike a stock sale, when ownership is transferred and the buyer generally acquires the company along with its existing liabilities.
“Asset sales do not inherently get companies out from under the legal liabilities they have already incurred,” the Newspaper Guild of Pittsburgh said in a news release following the news. “PG Publishing Co. continues to owe its workers several million dollars, and the enforcement of unfair labor practice rulings, including a requirement to bargain in good faith, remain.”
Guild attorney Joseph J. Pass said it was unlikely that Venetoulis Institute would assume the responsibility to pay union members any of the money incurred during the strike.
Taha Ahsin, an assistant professor at the University of Pittsburgh’s Katz School of Business, said Block Communications could still file for bankruptcy to possibly avoid financial liability, depending on how the business entity is structured.
The deal between Venetoulis Institute and Block Communications sold assets such as the trademark, physical infrastructure and the website. However, Block Communications could still own the labor contracts, Ahsin said.
Block Communications, at the time of the closure announcement in January, said it had lost more than $350 million over the past 20 years operating the Post-Gazette.
Block Communications also shuttered its other Pittsburgh publication, Pittsburgh City Paper. City Paper was relaunched in March, funded by private investment and partnership with the nonprofit LocalMatters and The Lenfest Institute.
Venetoulis Institute for Local Journalism is a nonprofit organization founded in 2021 by Bainum, a Maryland businessman and philanthropist. The new owners plan to maintain the Post-Gazette’s two print publication days, Thursday and Sunday, the Post-Gazette reported.
Bainum founded Venetoulis Institute and The Baltimore Banner with a $50 million commitment in 2022. The purchase of the Post-Gazette is part of an additional $30 million pledge Bainum will give to the institute over the next five years, the Banner reported.
“Local journalism is essential to a strong community, but across the country the business model has been under severe strain,” Bainum said in a news release. “We believe there is a path forward — one that combines great journalism with a diversified business model built on scale and exceptional talent.”
The Banner is primarily digital, designed for online consumption rather than a daily physical newspaper. The Banner, like the Post-Gazette, has a paywall.
Shribman returns
Following the acquisition, David Shribman, the Post-Gazette executive editor from 2003 to 2019, will join the Venetoulis board of directors. Shribman previously served as assistant managing editor of The Boston Globe and politics correspondent at The Wall Street Journal and The New York Times.
“The Block family has worked to find the best possible source for responsible local journalism for the Pittsburgh region and we believe we have succeeded,” said Karen Johnese, chairperson of Block Communications.
Striking Newspaper Guild of Pittsburgh members voted in November to return to work, following a federal appellate court panel decision in their favor.
The decision by three judges on the U.S. 3rd Circuit Court of Appeals ruled that the Post-Gazette bargained in bad faith while trying to agree on a new contract.
Post-Gazette management said at the time that the court decision, if allowed to stand, could force the closure of the newspaper.
Jodi Miehls, president of Block Communications, informed staff of the decision to close during a pre-recorded, 2½-minute Zoom call on Jan. 7.
Goldstein told TribLive in January that “instead of simply following the law, the owners chose to punish local journalists and the city of Pittsburgh.”
The future status of the union at the Post-Gazette, or what role it would play after ownership changes hands, was unclear Tuesday.
Pass, the attorney for the Guild, said the union had not yet spoken with the new owners and that members and leadership were discussing the deal internally.
Reporters and other staff members applauded the announcement, said Ed Blazina, a union officer.
Blazina, who stressed he was not speaking on behalf of the union, said staff was told there would be conversations over the next week regarding staff size.
“I’m at the end of my career … my future is different than someone 25 or 30 years old,” Blazina said.
Beginning May 9, Trib Total Media will launch a Pittsburgh edition of the Tribune-Review — a new weekend print publication of general circulation featuring original local reporting focused on the city and Allegheny County.