The Springfield Journal Review's new owner gobbles up small papers and piles on debt.

If eveything goes as planned, Springfield's hometown daily newspaper will soon have a new owner. Fairport, N.Y.-based GateHouse Media Inc. recently announced an agreement to buy the State Journal-Register and six other dailies and two weeklies in Illinois and Ohio for $380 million. The seller, Copley Press, of La Jolla, Calif., put its Midwestern properties on the market last year. Subject to approval by regulatory officials, which is expected, the deal was set to be completed by the end of April.

What happens then--whether there will be changes in content or personnel--is unknown. GateHouse spokeswoman Francie Nagy says the company isn't "looking to comment on anything right now." For the time being it's business as usual at the Springfield Journal Review (SJ-R) and its sister, the Lincoln Courier, said publisher Sue Schmitt.

Schmitt said that GateHouse representatives have yet to travel to Illinois' capital city. Doing so, she says, would be premature.

In recent years, newspaper companies have been pounded by declining circulation, competition for ad dollars, and the fluctuating cost of newsprint. Although some newspaper chains have crumbled under the pressure, little-known GateHouse has quietly become one of the nation's largest newspaper companies, at least measured by the number of titles it owns.

Not counting the Copley papers, GateHouse has 74 dailies, 226 weeklies, and 113 shoppers (including the Springfield Shopper) in 18 states.

Gatehouse has several newspaper properties in Missouri, including dailies in Boonville, Carthage, Kirksville, Maryville, Rolla, Moberly, Mexico and other Missouri cities.

GateHouse began business in 1997 as Liberty Group Publishing, the company formed to acquire some of the U.S. newspaper properties of Conrad Black's Hollinger International Group. Current chief executive officer Mike Reed later changed the company's name and moved the headquarters from Illinois to upstate New York in 2006.

GateHouse's business strategy of acquiring newspapers in smaller communities and heavily emphasizing local coverage seems to have been a winning plan for the company's stockholders. Despite a history of losses, the profit picture appears to be improving. Operating losses in 2006, for example, were 814.9 million on revenues of $314.9 million, compared with a loss of $30.7 million on revenues of $200.1 million in 2004.

At the same time, as the company expands, it's piling on more and more debt--$690 million as of March 9, according to its 2006 annual report, filed recently with the Securities and Exchange Commission. The company, which paid $49.7 million in interest last year, warns in its filing that "our indebtedness could adversely affect our financial health."

GateHouse, which is controlled by private equity firm Fortress Investment Group LLC, went public in October and trades under the symbol GHS on the New York Stock Exchange.

The Copley papers will present new challenges for GateHouse. The SJ-R, with circulations of 61,330 on Sundays and 51,850 on weekdays, will soon become one of the largest GateHouse newspapers--and the first daily operating in a capital city. It's unclear how GateHouse's "hyperlocal" editorial philosophy will jibe with the SJ-R's statewide scope and national coverage. Typically, a change in ownership of large newspapers is followed by job cuts in the newsroom, but that may not be the case for leaner, smaller dailies.

Bob Neil, president of the Quincy, Mass., Newspaper Guild, the union that represents workers at the Patriot Ledger, says that although some staff changes were made when GateHouse bought that paper last summer, the experience hasn't been too bad--a few people's contracts were bought out, but the company found jobs elsewhere for others.

"We understand that they need to make changes," Neil says. "We know that things have to change, and we've been working with them to protect our members and as many jobs as we can."

"We're not going to speculate on what they're going to have us do," Schmitt says. "We're a quite different newspaper than they usually acquire."

R.L. Nave is a staff writer at Illinois Times. This article is reprinted from the Illinois Times with permission.