The $1.1 billion purchase of Gannett—publisher of USA Today—by GateHouse closed Tuesday, creating a newspaper industry goliath and starting a search for $300 million in yearly spending cuts. The new company, which will be called Gannett, will own about 260 daily newspapers and hundreds of weeklies, the AP reports. Gannett brings papers including the Arizona Republic and Detroit Free Press, while GateHouse adds the Austin American-Statesman and Providence Journal. Both companies have a history of cutting newsroom jobs, but executives said they'll search elsewhere for savings first. "We are looking to protect as many of these jobs as possible," said Paul Bascobert, per the Wall Street Journal. The $300 million represents about 8% of the two companies’ total operating costs last year. The companies say they have about 24,000 employees, 5,000 of whom work in newsrooms.
If a newspaper publisher of that size can't make it, the Journal points out, it's hard to see how smaller companies that cover local news can survive in the declining industry. The effects of news companies disappearing are many, Brookings' FixGov points out. Places that become news deserts have fewer people run for mayor, for example, and are more likely to vote for members of the same party for president and senator. The cost of municipal and revenue bonds are more likely to rise as the number of reporters covering city hall falls. "We believe we have a strategy that will result in ... not just preserving local journalism, but letting local journalism thrive," said Mike Reed, who will be CEO of the new Gannett. (Read more Gannett stories.)