You think $300 million in costs cut is a big number? Try $400 million. Or more than $400 million.

Those are the internal numbers in the air as America’s two largest newspaper chains, Gannett and GateHouse, try to land their megamerger, first announced in August.

Follow the money: When I first wrote about this potential union back in July, the estimated annual cost savings — “synergy” — to be derived from a merger was “something like $200 million.” By August , it was “$200 to 300 million.” Then it was “$275–300 million.” Now, talk has gone to $400 million and beyond, into the range of nearly half a billion dollars.

What does that mean? Almost certainly, even more reduction in headcount than had been anticipated. (Executives declined to comment on the amount the synergies they’re now eyeing.)

How much? In any room of eight people at a current GateHouse or Gannett operation, one is likely to see her job gone in 2020. One in eight would add up to 3,450 of the combined companies’ 27,600 jobs. Some observers expect that the final total to be higher than that. And the company won’t wait for the first of the year to begin layoffs: With immediate savings a priority, expect those anxiety-inducing conversations to begin right after Thanksgiving.

Those layoffs may well be on top of those already going forward in current Gannett newsrooms. As Gannett finishes its regular budgeting for 2020, its newsrooms can expect 3 to 5 percent cuts in their budgets, sources tell me.

This morning marked the penultimate go-ahead in what has been a yearlong process. Shareholders of both Gannett and GateHouse voted this morning on the merger, which will create a giant (for newspapers) company that will retain the Gannett name. (The shareholders voting for GateHouse are owners of New Media Investment Group, a.k.a. NEWM, GateHouse’s holding company.)

Both said yes. NEWM’s board went first: “Precise vote totals were not immediately available, but New Media CEO Mike Reed said that about 99% of the 75% of shareholders who voted approved the deal.” Then the results of Gannett’s vote was announced at 10 a.m.

They approved the deal despite the value of the deal plummeting since it was first announced. On that day in August, NEWM shares stood at $10.70. At market close yesterday, they’d dropped to $6.68, including a six percent decline on Wednesday alone. The deal originally valued at $1.38 billion is now worth $1.13 billion.

Why the drop? Some investors looking at the deal had hoped it would fail and thought they could catch a NEWM bounce; perhaps some abandoned the stock as the merger became a near-certainty. Perhaps you can blame McClatchy, the next largest newspaper chain, for souring the market; its stock dropped 12 percent yesterday after it announced that the IRS had denied its request for pension fund funding relief. (It’s down 22 percent since Friday.)

Or maybe it was just the accumulated toll of poor earnings reports from both GateHouse and Gannett. Or did major NEWM investor Leon Cooperman’s pooh-poohing of New Gannett’s projections — “nobody believes any of the numbers coming out” — convince others to get out? (Cooperman’s been in the news lately for other reasons.) Gannett’s USA Today reported that some “large investors in New Media appear to have sold off shares earlier this week.”

Figure that some combination of all those explanations is at play.

Anyway, life, such as it is in the daily industry, goes on. Following today’s votes, expect the deal to formally close — and New Gannett to become a corporate reality — on November 19.

Industry watchers, then, will have their eyes on the next announcement, expected on or around the next day, November 20. That’s when CEO Mike Reed and Gannett operating head Paul Bascobert will name their new executive team. Today I can offer a likely preview of who’ll ascend in the new Gannett order. Before that, though, let’s break down this megamerger as it concludes — and then take a look at what’s likely for the company that will operate 18 percent of America’s daily newspapers.

Actually, let’s start with some news: the next big newspaper M&A deal, which I can now report is (once again) in progress. McClatchy and Tribune executives are talking about merging their two companies, I’ve confirmed with several sources. While I don’t expect any imminent announcements, both companies’ executives agree that, in this rapidly deteriorating operating environment, a merger that buys time by massively cutting costs is a first order of 2020 business.

While the companies decline comment on what would be the next largest — and most logical — remaining combination, it’s clear what obstacles will need to be cleared to pull it off. Let’s call them the two Fs.

The first F: Financing. McClatchy and Tribune will argue that adding the two companies together, likely creating synergies in the $200 million-plus range, will create a less leveraged, financially healthier company. But can they get the financing to get the deal done, given the limited interest most banks are showing in the industry? And if they do, can get they get it at an interest rate of lower than the 11.5 percent that New Gannett is paying Apollo Global Capital for its $1.8 billion in financing. (Remember, the need to pay back that loan quickly is a big driver of New Gannett’s ever-increasing cuts.)

The second F: Ferro. Michael Ferro, the former Tronc/Tribune board chair, nixed the last attempt at a McClatchy/Tribune combo last December. His group still holds 25 percent of Tribune, and they could once again stand in the way of a deal.

On the ground — that gyrating retail ground in all the 38 McClatchy and Tribune markets, — revenue declines worsen, and the worries about 2020 deepen. Tribune, in last week’s quarterly earnings report, said ad revenues were down 15 percent — in both print and digital — with total revenues down 7.7 percent. McClatchy, in its earnings report Wednesday, said ad revenues were down 19.3 percent, with total revenues down 12 percent.

Worse, McClatchy has to deal with its ongoing pension plan problems, now negotiating “a distressed termination” with the federal Pension Benefit Guaranty Corporation. Though it was able to report in first gain in quarterly EBITDA in eight years, the stress on the company is clearly intensifying. It reported that the money it owes the pension “greatly exceeds the company’s anticipated cash balances and cash flow given the size of its operations relative to the obligations due, and creates a significant liquidity challenge in 2020.”

Meanwhile, Tribune announced this morning that it would begin issuing a quarterly cash dividend for shareholders. And not a cheap one: $0.25 per share, per quarter. With 36.02 million shares of stock outstanding, that adds up to about $36 million per year going to shareholders — despite the company being in the red by $9.1 million for the first three quarters of 2019. As MarketWatch notes, that’s “a dividend yield of 10.47%, compared with the implied yield for the S&P 500 of 1.92%.” That might attract cashflow-hungry investors but it also removes $36 million a year that could go toward investing in the future.

“The ability to hire and retain top talent remains one of our top priorities.” My colleagues have to chose between keeping their job & having health care because they literally cannot afford the increases. But yes, please, tell me about how our work is benefiting shareholders. pic.twitter.com/zrOCwEq0Tp — Danielle Ohl (@DTOhl) November 14, 2019

Put it all together and the 2019 Consolidation Games , first previewed here in January, are set to extend into the new decade.

The megamerger will win headlines with the vote today and then the closing next week, but the focus will likely shift to the substantial head-rolling. That’s understandable, as these employees sadly find themselves joining tens of thousands of others who have departed the newspaper industry in the last decade.

The biggest question, though, is what the deal will come to mean for American local journalism, and that’s the big picture we’ll be looking out for.

We already know that the deal of Mike Reed’s career will focus first on both rapid reduction of his huge debt and the maintenance/improvement of the dividend that has sustained NEWM investment over the years. A lot of New Gannett’s cashflow will be exiting through one of those two doors. How much will remain to pay journalists and essential product people in 2020, 2021 and into 2022 — to invest in the product — is the big unknown.

How did we get here?

Last December, Gannett CEO Bob Dickey surprised his colleagues by announcing his retirement. The company was caught unprepared, with no likely internal successor in view.

Smelling opportunity, Alden Global Capital president Heath Freeman — proprietor of the shapeshifting chain MNG , successor in various ways to MediaNews Group, Digital First Media, Journal Register, and 21st Century Media — made his move. He offered to buy Gannett . Though both his intentions and access to financing remained suspect, the Gannett board and management edged toward panic. Could storied Gannett — founded 1923, the largest U.S. newspaper publisher, second to News Corp globally — be swallowed up by a hedge fund that had become the poster child for milking the U.S. press on its way toward oblivion?

As Gannett pondered its options in fighting Alden — resulting in a later board battle and more — Mike Reed smelled both opportunity and the whiff of panic. He called Gannett, offering GateHouse as a friendlier merger partner. Reed looked great compared to Heath Freeman, Gannett executives said to each other.

Lots of valuing, negotiating, and comfort-seeking followed through the year. In the end, though, that’s how private equity Fortress Investment Group has come to control and manage the biggest daily newspaper chain in U.S. history.

Now let’s consider the numbers, the people, and the decisions ahead.

The numbers

The big number is that synergy number, now sitting at $400 million or more.

Though Reed has said editorial cuts would be minimal, “there’s no way they can get that number without significant newsroom cuts,” one person very close to the deal told me. Other sources have echoed that belief. With headcount amounting to about 50 percent of total expense, most are placing the overall number of FTE cuts at more than 3,000. Some believe the number, over the next year, will come in at somewhere between 3,500 and 4,000. It’s unlikely we’ll know the actual number for awhile, and then only through extrapolation.

For a sense of scale, when this deal closes, McClatchy will be the second largest U.S. newspaper company by circulation, behind New Gannett. It has fewer than 2,800 employees in total. So New Gannett will cut more jobs — perhaps substantially more — than its biggest competitor even has.

Why has the number grown from the $275 million to $300 million first cited by Reed?

First, undoubtedly: Operating revenue keeps getting worse, quarter by quarter. And it may be that even Reed doesn’t want to bet on the highly optimistic revenue forecasts he has offered investors in his merger prospectus.

It was on GateHouse’s earning call last week that Leon Cooperman made mincemeat of Reed’s numbers. In colorful language rarely seen on the by-the-book quarterly financial result conference calls, Cooperman laid into those forecasts:

When I listen to you, Mike, on the call, I’m reminded of the deceased comedian, Rodney Dangerfield, who used to complain he gets no respect. And, so I look at page 88 of the S4, the proxy statement that came out and connects with the merger. And if I take the numbers there, the stock is presently trading at 2.7× EBITDA. And this assumption, so nobody believes the numbers, no, on the resized dividend, the stock gives 9%, you’re 2.7× EBITDA. In 2021, you’re going to fix the financing. Nobody believes it. And I think part of the problem is Gannett’s total revenues have been declining at over 9% over the past few quarters. New Media’s revenues have been declining at around 7%. In fact, I think the Q3 was 7.9%. Post-merger, you’re projecting declines 3.5% in 2020, 1.5% in 2021 and down 0.4% in 2022. As regards margins, they’re running 11% to 12% currently. Post-merger, you’re expecting 15.6%, 18.6%, 21.3%, ’20, ’21, ’22. Now I can understand the margin expansion stemming from the synergies, but I don’t understand how we go from revenue declines that are 7% or 8% to 3% or 4%. What is behind that and how confident they are that this is going to be the case?

(Ouch. Elizabeth Warren isn’t the only one getting Cooperman’s toughest these days.)

In response, Reed emphasized the minimizing of the part of the business going south the fastest — print advertising — and the increased focus on growth areas. He also highlighted the events production business GateHouse Live, a fast-growing, high-margin unit that will be brought as quickly as possible to Gannett markets. (“So 85% of our revenues will be driven by categories that we feel we can have either stable or growing,” he said. “So we feel very confident over the three-year period that the biggest driver of declines, print advertising, will be a very small portion of our overall business.”)

But a simple truism applies here. If you have a number to hit, it’s far easier to get there by cutting expenses than to really rely on improved revenues. Cutting big and cutting deep at the outset offers Reed some insurance. That way, he knows he’ll be able to pay off the Apollo debt and maintain investor dividends.

Despite Cooperman’s astute skepticism, he’s maintained his support of the merger.

Why? The same reason I’ve repeated throughout the year: No one loves this deal, but it is probably the best that can done now to possibly salvage investors’ stakes. That’s what I hear from those in and around it. For publicly traded, single-class newspaper companies — a species that night not survive the 2020s — it’s all about the art of the imminently possible.

We’ll learn more about this merger as numbers tumble out through 2020, in quarterly reports and SEC filings. How much will the company pay out early in the year to some of the passed-over Gannett and GateHouse executives, who’ll be deploying their golden parachutes? How many tens of millions will be paid out in severance to generate those huge cost savings?

And how does the combined company actually perform? It will take as long as 15 months to get a true apples-to-apples comparison on revenues and profits. In the interim, it’s a lot of extrapolation.

For the numbers junkies out there, the NewsGuild’s Tony Daley, a research economist, has written an exhaustive account of the GateHouse/Fortress timeline, with lots of data. The guild, newly energized by the wave of unionization spreading across digital media, issued its own denunciation of the megamerger last week, saying “journalism will suffer.”

The people

There’s the figures and facts, and then there’s the people — and the gnarlier question of culture. GateHousers pride themselves on moving fast, breaking things, and getting things done. Gannetteers point to the greater sophistication of their systems and processes and their deeper benches of talent. Expect those benches to thin quickly, given the cuts.

Already within Gannett, sources say, business managers have gotten the message and are picking up the pace. Soon they’ll see how many of them survive to work on the always-tough process of merging two companies.

Top executives will try to do what they can to reduce how long that process takes, but everyone expects it to take something like 18 to 24 months to unwind, rewind, and combine how things work. All that is an opportunity cost — potentially productive time and resources that are devoted more to internal change than external business management.

That brings us to the new top management. Sources tell me the new lineup is fairly clear, but it could still change before announcement.

We’ve already known that Paul Bascobert would become New Gannett’s operating CEO, reporting to Reed. Accepting Bascobert, who was just hired by Gannett this summer, was part of the deal to which Reed agreed. That meant that Reed’s longtime business partner, Kirk Davis, would not move into the same No. 2 post at the new company. Davis, well-liked by his management troops and respected as a leading operator in revenue performance in the industry, has decided to leave the company rather than take on a lesser position.

Surprisingly, perhaps, in a merger driven by GateHouse, a number of Gannett executives appear positioned to take big roles at the merged company. In fact, some in GateHouse find the amount of Gannett influence in the new company disappointing.

Several top Gannett executives are expected to assume similar positions in the new company, say several sources. Current Gannett CFO Alison Engel is one. (New Media currently lists its CFO as “TBD.”) In the all-important revenue leadership position, Gannett chief revenue officer/ USA Today Network Marketing Solutions head Kevin Gentzel will move into that bigger job with the new company. Similarly, Maribel Wadsworth, currently president of USA Today Network and publisher of USA Today, “oversee[ing] the company’s consumer business,” will take on a similar role at New Gannett.

From GateHouse, Denise Robbins, SVP of consumer marketing, is expected to take a similar job. Jason Taylor, who heads up GateHouse’s new ventures unit, including GateHouse Live, will maintain a similar portfolio, sources tell me.

The decisions

Given all the pressures on the companies and the industry, lots is on the table.

Early in 2020, the company will decide which of its newspaper properties to sell or swap. “Asset sales” are a key part of the Q1 agenda — though I don’t expect major sales, just some one-offs. Reed will also get cash for some of the remaining real estate that Gannett brings into the deal, much of which came with its own acquisitions over the past several years.

We do know something about what the parties have valued as they put the deal together. Gannett’s national digital ad network is one of those, bringing in plus revenue for the company, sources say. Adding GateHouse’s digital audience to that network will add scale, and scale is good. Likewise, expect to see that USA Today’s branding extended across all the sites.

Will USA Today the newspaper continue publication? At Poynter, Rick Edmonds has detailed the likely approach of its end of print. How long that’ll take will likely be the question. In the meantime, its branding, ironically, will be ascendant. And that leaves big questions about Gannett’s national journalism staff. With a large Washington bureau and USA Today’s staff, where do those journalists fit in the new company’s strategy?

We also know, as noted above, that GateHouse Live is highly valued and will be extended to Gannett properties.

But how will the various digital marketing companies of both Gannett and GateHouse be combined? And can the company find ways to improve margins in this once-highly-touted growth business that has produced disappointing cashflow for many publishers?

Bascobert has outlined a “marketplaces” strategy in his early visits to company cities. Bascobert, previously of The Knot/XO Group, has told staffers he sees such marketplaces as a new central point of rebuilding the local commercial advertising business. In the months ahead, we’ll see what kinds of marketplaces New Gannett will test.

Finally, there are the regional design centers. Gannett has operated several of them; GateHouse has largely centralized its page makeup and production work in Austin. Those centers have already eliminated lots of news production jobs at local papers. How much more can their work be rationalized, squeezed, or made “more efficient”?

In fact, that’s the all-encompassing question here. Neither of these two companies are known for excess or big spending, in their journalism or elsewhere. They’ve both already been well squeezed, for many years.

How much juice is left to extract? And when the juicing is done, what’s left for the readers? Money for journalism: That’s still the root question here.

Tens of millions have gone out to Fortress Investment over the years, and there are still tens of millions left to go, as Fortress serves out its final two-year management contract and then exits with a new package of shares worth tens of millions more. That’s money that, like GateHouse’s dividends, hasn’t paid and won’t pay for journalism.

How questionable are those payments, even within the traditional private equity world?

Take it from Leon Cooperman — as hard-boiled a capitalist as they come — who had his own comment on the matter on GateHouse’s earnings call: