September 5, 2022

interteiment

Innovation Leader

Why a New Jersey technology firm bought a bunch of newspapers in Greater Minnesota. And what it wants to do with them.

The news came out of nowhere. Brian Larsen, editor of the Cook County News-Herald in Grand Marais, had no idea the weekly newspaper he worked at for 13 years was for sale until outgoing owners Hal and Deidre Kettunen broke it to him over an office pizza lunch in November 2020.

Moments later, still in shock, Larsen watched as the new owners entered the break room and introduced themselves. Larsen had never heard of the company, a New Jersey-based information tech firm called CherryRoad Technologies, its CEO, Jeremy Gulban or any of its other executives. That wasn’t surprising. CherryRoad had no media holdings before it bought the News-Herald, though that would quickly change.

In short order, CherryRoad Media, the firm’s new communications division, embarked on a newspaper buying spree, largely in the Midwest and the South. It purchased seven Minnesota newspapers formerly owned by Gannett, Inc. and launched one in International Falls. CherryRoad now owns 49 papers in 10 states, including the Lake County Press, which opened in Two Harbors last month.

It’s a strategy Gulban hopes will showcase CherryRoad Media’s tech offerings while bolstering local news products stripped bare by profit-driven chain ownership. Gulban says CherryRoad plans to invest in these newspapers, not mine them for their assets. That’s a refreshing change from the shark-tank world of corporate journalism.

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“As I’ve gotten more involved with it, I have really come to realize how (important to) a small community the newspaper really is,” Gulban said in a phone interview from CherryRoad’s Parsippany, N.J. headquarters. “When you go out into these smaller, rural communities, there really is no other real source of news. People really do count on the local newspaper to provide that. It’s really an institution in the community.

“What I’ve also learned is, it takes a tremendous amount of attention to detail to run these smaller newspapers, and I think bigger companies aren’t necessarily suited for that. We are, because we’re a small organization. We’re more nimble. We’re more able to react. The number of calls I get every day from the various small papers that we have that require a response, it’s very hard for a large organization to handle something like that.”

CherryRoad CEO Jeremy Gulban

One important caveat: Just because CherryRoad is a tech company doesn’t mean all functions are moving online. Gulban understands many readers like a newspaper in their hands, so CherryRoad will continue to publish print editions. That’s a relief to Larsen, 65, a print guy at heart and one of the News-Herald’s two full-time employees, a combination editor/reporter/advertising and production manager.

“Hal and Deidre said they were a month away from closing the paper when Jeremy bought them out, so it was a godsend that Jeremy came in,” he said. 

Until buying the News-Herald, Gulban had no previous connection to Minnesota or the newspaper industry. His father Michael founded CherryRoad in 1983; the name derives from the firm’s original address. According to Dun & Bradstreet, the company generated almost $98 million in revenue in 2020. Gulban joined the firm after graduating from Drew University, a small private liberal arts college in Madison, N.J., where he majored in economics and minored in political science.

“I’ve always been very interested in politics and government,” Gulban said. “I guess I kind of realized through this process I was always into the news, probably way more than I would have acknowledged. But no formal training in journalism or news. Just kind of picking up as we go here.”

When the pandemic hit, Gulban said CherryRoad created tech tools to help school districts and local governments navigate the learning and communication challenges. They offered them around, for free, but found no takers. 

“Everyone’s answer was, we’ve already got it covered. We’re using Google, we’re using Facebook, we’re using YouTube,” Gulban said. 

“We started looking at other ways we could make a difference and use alternate technology sources outside of the big tech firms. We looked at newspapers as a possibility because 2020 was such a brutal year for newspapers, with the pandemic and a number of papers closing.”

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According to the Poynter Institute, more than 100 local newsrooms closed since the pandemic began, accelerating a trend that saw roughly 1,800 papers shut down since 2004. Most were weeklies in small towns like Warroad, which lost the Pioneer in 2019, and Two Harbors, where the Lake County News Chronicle shuttered in 2020.  

Gulban cast around for a small weekly to buy and found the News-Herald listed generically on a website. Steve Bragg, a business broker in the Arrowhead, placed the ad, describing the paper in broad terms to prevent employees from discovering it was for sale. Gulban contacted Bragg for more information, and the two hit it off. 

“He’s such a nice guy that you couldn’t help but continue to talk to him,” Gulban said. “If he had not been as friendly as he was, I probably would have said this was a terrible idea. But he was a good guy, very engaging.”

Bragg said there were other interested parties but none moved as quickly as Gulban, who flew to Minnesota to meet with him before closing the deal.

“He was really cordial in asking all the right questions all the way along,” Bragg said. “He was really easy to deal with, like he’d done this over and over. It went smooth, and if there was any kind of hiccup, he was real accommodating. He was fun to deal with. I hope I can deal with him again on something.”

Gulban was amazed to learn that in a county of 5,600 people, the News-Herald had about 2,200 subscribers, and sold 1,000 more single copies to vacationers during the summer. “That’s a huge coverage of the population,” he said. “If every newspaper matched that level of interest, newspapers would be doing great.”

A few months later, CherryRoad tried to buy the International Falls Journal from Alden Global Capital, the vulture hedge fund that owns the St. Paul Pioneer Press. Alden chose to fold the paper instead, so CherryRoad launched a replacement, the Rainy Lake Gazette, about three weeks later. 

Soon after, when Gannett sought to divest itself of small papers in Kansas and Missouri, CherryRoad jumped in. Then the seven southwestern Minnesota newspapers Gannett acquired after merging with GateHouse Media in 2020 came on the market, and CherryRoad bought them, too. 

Under GateHouse, the seven — the Crookston Times, Granite Falls Advocate Tribune, Montevideo American-News, Redwood Falls Gazette, St. James Plaindealer, Sleepy Eye Herald-Dispatch and Tri-County News in Cottonwood — endured the usual staff and salary cuts imposed by big chains beholden to stockholders and profit margins. It’s reached the point where Montevideo, Granite Falls and Tri-County share a lone editorial staffer, editor/writer/photographer Jessica Stölen-Jacobson.

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Ten years ago, Stölen-Jacobson quit the Tri-County News and opened a boutique, burned out after GateHouse reduced staff and cut her pay. But she missed journalism and signed on in Montevideo last April, in time to field complaints about a host of Gannett-imposed changes, including the USA Today-style design of the paper.

“That was very upsetting to people, especially in Montevideo,” she said. “They didn’t like that their paper looked like every other paper in the newsstands. They didn’t like seeing the staff leaving in droves, which happened when Gannett took over. 

“And then all the different things people needed to contact us for were divided up in different departments everywhere. For obituaries, they had to contact one department. For legal notices, they had to contact another department. To subscribe, they had to contact somebody else. And none of it was local.”

Under CherryRoad, things are looking up. The company is trying to hire a reporter in Granite Falls, and Gulban asked Stölen-Jacobson to consider how she wants the paper and website to look. Gulban hopes to roll out individual website redesigns for all CherryRoad properties in about a month, all with local input and no universal template like Gannett’s.

“CherryRoad has been really good about making these decisions ours, and giving us time to think about that, too,” Stölen-Jacobson said. “They prioritized putting money into the content end of things, which is a new concept for everybody who’s worked under bigger media companies.”

Gulban believes there’s a market for local news in these communities. He wants to give readers more of it, not less. “I think getting the news back to being local will help a lot,” Gulban said. “Those newspapers have lost circulation of the last several years as people have realized that, I can get my news somewhere else, why am I subscribing to this? And bringing it back to stories that matter locally will bring more subscribers in. Same thing with the advertising. 

“We also want to bring in more digital advertising and technical services around websites. Things like that I think can offer more value to a business. If you’re going to advertise in the print paper, we can also do digital advertising, get your website hosted for you, and put some of those expenses together in a better value package.”

In Grand Marais, CherryRoad quickly put money into the News-Herald. New desktop computers replaced ones that Larsen said were so old the technicians called in to repair them laughed. CherryRoad also purchased a new camera for the newsroom and fixed up the office alcove, adding a picnic table and flowers.

“Jeremy was like, whatever you need, let me know,” Larsen said. “He doesn’t ever say, I don’t want to see this or I don’t want to see that in the paper. It’s up to me pretty much to decide what goes in.”

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Larsen interrupted his phone interview with MinnPost to take a call from a subscriber. That’s what happens in an office with a staff of two. When he returned, Larsen had good news: The subscriber asked to re-up for two years instead of one. You could almost hear his smile widen.

“We’re getting a lot of that,” he said.

Why a New Jersey technology firm bought a bunch of newspapers in Greater Minnesota. And what it wants to do with them.