GateHouse Media, Inc. (GHS)

NetscribeMedia (36.71) Submitted: 3/20/07 8:50 AM : Start Price: $17.56 GHS Score: -74.90

GateHouse Media (GHS) is one of the largest publishers of locally based print and online media in the United States as measured by number of daily publications. GHS owns over 445 community publications located in 18 states across the country, and more than 235 related websites reaching approximately 9 million people on a weekly basis.


The U.S. community newspaper industry is largest and highly fragmented with more than 1,400 daily newspapers available in the country. The company derives more than three-fourth of its revenues from advertising. However over the years, the newspaper advertising spending has been negatively impacted by state of the overall economy, including unemployment rates, inflation, energy prices and consumer interest rates. Growth in readership and circulation could drive the advertisement revenue, but according to national Editor and Publisher data, both daily newspaper and Sunday circulation has been on a declining trend since their peak in 1985.


GateHouse through its geographic diversity, well-balanced portfolio of products, strong local franchises and broad customer base has been able to withstand this downturn in newspaper industry. Local businesses prefer newspaper advertisement to be more productive when compared to other advertisement channels to reach their target audience. The company’s presence in these areas makes its advertising revenue to be less sensitive to economic cycles than national advertising.


GateHouse in a move to increase their overall circulation has acquired 25 publications. More recently the company has bought nine newspapers from privately held Copley Press. These acquisitions should provide a push to increase its subscriber base. This in turn should influence the demand for advertising revenue. The company through such inorganic growth should be able to beat the market at least for the coming year.

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