Parent companies of ‘The Arizona Republic’ and ‘Arizona Capitol Times’ to join

A cash-and-stock deal could be announced in next few weeks, as the companies grapple with brutal environment for local newspapers

USA Today publisher Gannett Co. is nearing a deal to combine with rival GateHouse Media, people familiar with the matter said, a move that would join the nation’s two largest newspaper groups by circulation at a time local media is in a battle for survival.

The companies are grappling with a brutal environment for local newspapers around the country. Private-equity-backed GateHouse has a reputation for aggressively slashing expenses at titles it acquires, The Wall Street Journal reports.

Local papers have suffered particularly sharp declines in circulation compared to national outlets as readers look elsewhere for news and classified ads disappear. They have also lost more of their online-advertising business to tech giants such as Facebook Inc. and Alphabet Inc.

The Journal says GateHouse is currently the largest newspaper publisher in the U.S. by titles owned, with 156 dailies and 464 weeklies, most of which are in small markets. It is No. 2 by circulation, behind Gannett, which owns 109 dailies including The Arizona Republic, Milwaukee Journal Sentinel  Indianapolis Star—in addition to its flagship USA Today.

GateHouse has been on a buying spree recently, spending close to $1 billion in recent years acquiring dozens of small and medium-size papers around the country—including the Palm Beach Post, Austin American-Statesman and Arizona Capitol Times.

Nearly 1,800 newspapers closed between 2004 and 2018, leaving 200 counties in the U.S. without a paper and roughly half the counties in the country with only one, according to a University of North Carolina study. That has stoked concerns that a crucial source of reporting around the country is being starved.

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