2nd Quarter 2010
Family Owners Make a Change
Two families sell east coast dailies in second quarter deals
Second quarter deal activity was highlighted by announcements concerning the sale of two family-owned newspapers and the consolidation of two dailies in Honolulu.
These transactions were announced as the industry’s financial performance continues to improve. Although advertising revenue remains lower than last year, most newspaper owners are seeing improved profitability.
Looking forward, Dirks, Van Essen & Murray expects newspaper deal flow to build in the second half of the year in anticipation that ad revenues will level off before year-end. The landscape remains uneven, however, and transactions often require some creativity in order to get to closing.
Start Your Engines
Scoop Sample added to his holdings in the Northeast with the purchase of the Laconia (NH) Citizen through his company Eagle Printing &âï¿½ï¿½Publishing, LLC. Laconia is home to one of the nation’s largest motorcycle “Bike Weeks.”
The Laconia newspaper and related website, Citizen.com, had been owned by the Foster family, which will continue to own and operate Foster’s Daily Democrat based in Dover, New Hampshire. The Fosters acquired the Laconia newspaper in 1991 from the Smith family, who founded it in 1925.
Under the Foster’s stewardship the Citizen added a Sunday newspaper and was recognized with several prestigious news-editorial awards, including the “Nackey S. Loeb First Amendment Award.”
Sample publishes daily and weekly newspapers in Maine, New Hampshire, New Jersey, New York, Pennsylvania and Vermont. The closest operation is in Claremont, New Hampshire, where he publishes the Eagle-Times. Sample bought the assets of the Eagle-Times in 2009 in a court-approved sale.
Patrice D. Foster, president and publisher of George J. Foster Co., Inc., said her company will focus on its other operations, which include the Dover daily, weekly newspapers in New Hampshire and Maine, a tourist magazine serving a number of markets and a direct mail marketing firm.
Deal on the Pamlico
When the Washington (NC) Daily News won a Pulitzer Prize in 1990, it proudly proclaimed in a headline, “Pulitzer on the Pamlico!” in reference to the river on which the city sits in eastern North Carolina.
In June the family owners responsible for winning that Pulitzer announced they had reached an agreement in principle to sell controlling interest in the newspaper and related publications to a newly formed company led by Boone Newspapers of Tuscaloosa, Alabama.
The Futrell family, which has owned the Daily News for more than 60 years, will retain a minority stake in the new company.
Ashley B. “Brownie” Futrell, Jr. plans to retire as president and publisher of the newspaper. His successor, Ray McKeithan, the current associate publisher and general manager, also will have a minority interest in the new company.
Included in the transaction are the 8,500-circulation Daily News and the weekly Scuppernong Reminder, which serves a neighboring county. Both currently are printed by the Greenville Daily Reflector.
The Futrells are keeping a weekly newspaper published on Ocracoke Island, which is part of the Outer Banks of North Carolina.
Boone Newspapers owns and manages newspapers in similar-sized communities in North Carolina, Virginia, Georgia, Alabama, Mississippi, Minnesota, Ohio and Michigan. Operations near Washington include the Roanoke-Chowan (NC) Herald in Ahoskie, the Gates County (NC) Index, the Suffolk (VA) News-Herald and the Franklin (VA) Tidewater News.
Futrell’s father began working at the Daily News in 1949 as editor and publisher and acquired the newspaper – with the help of a local bank – following the death of the owner.
The newspaper won the nation’s top journalism prize for Meritorious Public Service for a series of stories detailing the percentage of cancer-causing chemicals in the city’s water supply. The Daily News remains the smallest daily ever to win a Pulitzer.
Honolulu Sale Closed
Gannett Co. completed the sale of its Honolulu daily newspaper to David Black, owner of the competing daily in Hawaii’s largest market. The Honolulu Advertiser and Honolulu Star-Bulletin merged into a single newspaper operation on June 7 – now known as the Star Advertiser.
Honolulu was a competitive print market dating back to the mid-1800s, when much of the press was controlled by Hawaii’s royal family. The newspaper field included the Bulletin, the Star and the Advertiser when Hawaii was annexed to the United States in 1898. The Star and Bulletin later merged, setting the stage for several decades of intense competition.
In 1962 the two newspapers agreed to a cease fire and formed a Joint Operating Agency to run the business aspects of the two newspapers while maintaining separate newsrooms. A decade later Gannett acquired the Star-Bulletin.
In 1992 Gannett bought the Advertiser and sold the Star-Bulletin’s interest in the JOA to a newly formed company. Newspaper competition returned to the island in 2000 when the Star-Bulletin was sold to David Black as part of the dissolution of the JOA.
A unit of Johnson Newspaper Corp. acquired two non-daily newspapers strategic to its operations in the Hudson Valley south of Albany, New York.
The publications acquired include the Greene County Local Courier and the Ravena News-Herald, located just across the Greene County line. Johnson owns two dailies in the region – the Daily Mail in Greene County and the Register-Star in Columbia County – and three weeklies.
Canwest Global Communications Corp. has received court approval to sell its publishing and online division to a group of the company’s unsecured creditors. Canwest has been restructuring its broadcast and publishing business under protection from creditors since October 2009.
Published reports have identified a U.S. hedge fund, Golden Tree Asset Management, and Canadian investment funds TD Asset Management and Invesco Trimark as the principal members of the group buying the Canwest newspapers. The group beat out a competing bid from Canadian publisher Torstar Corp.
The group will pay off the secured creditors and may take the operations public after closing the transaction.