3rd Quarter 2012
Suburban operations, large daily newspapers among the titles sold
Newspaper acquisition activity kept up a steady pace in the third quarter, following a frenetic first half of the year.The buyers included some of the same companies that have been active over the past 18 months, plus some new entrants who see good opportunities in the print/digital franchises controlled by local newspapers.
Newspaper operations sold in the 3rd quarter included large suburban groups in Houston and Chicago, the last of Media General’s newspapers and Lee Enterprises’ southern California publishing group.
By the end of the year, 2012 is likely to see the most daily newspapers sold since the record-breaking year of 2007.
One of the new entrants into newspaper ownership was private equity firm Revolution Capital Group, which acquired Media General’s Tampa (FL) Tribune and related publications in early October.
Earlier in the year, Media General had sold most of its newspapers to Berkshire Hathaway’s BH Media Group. The sale of the 145,000-circulation Tampa Tribune represents the final newspaper divestiture for Media General, which remains a publicly traded company principally with broadcast television holdings.
The transaction includes the related publications Hernando Today, Highlands Today, Suncoast News, Sunbelt Newspapers and the Spanish-language Centro.
The Tampa Tribune will be Los Angeles-based Revolution Capital’s only media portfolio company. Its other holdings include a manufacturer of woven materials, an online software firm serving the financial industry and a medical apparel maker.
Two-Timing in Texas
Suburban newspaper operators Randy Miller and Arne Hoel acquired Houston Community Newspapers, publisher of 28 newspapers serving communities around downtown Houston.
Earlier in 2012, the pair had bought a suburban group in the Dallas area. They also own newspapers in Arizona.
The Houston group consists of primarily controlled-distribution weeklies with distribution of more than 500,000. It also includes a daily newspaper in Conroe, north of Houston.
The acquiring company, 1013 Communications, now has more than 1 million weekly circulation in Houston, Dallas and Arizona.
The sale of the Houston group was the final divestiture for ASP Westward, which had owned the Houston newspapers since 2002. Earlier in 2012 ASP sold its northeast Texas daily and weekly newspapers headquartered in Longview (see related story page 3) and a suburban group in the Denver area.
Family-owned Shaw Media bought a suburban Chicago publishing group owned by GateHouse Media that will complement Shaw’s holdings in northern Illinois.
The group, Suburban Life, consists of 22 weekly newspapers in Chicago’s western suburban communities. The Suburban Life publications will expand Shaw’s presence in the region.
Shaw’s holdings include the daily Northwest Herald in nearby Crystal Lake and a number of publications in Chicago’s western suburbs.
In addition, Shaw Media agreed to participate in adhance media, GateHouse Media’s online private ad exchange, to fill unsold inventory on Shaw’s digital operations.
Most of GateHouse Media’s newspapers serve non-suburban markets.
San Diego Expansion
The owners of U-T San Diego bought its neighbor in northern San Diego County just about one year after acquiring the newspaper formerly known as the San Diego Union-Tribune.
Local developer Doug Manchester and radio entrepreneur John Lynch, who acquired the Union-Tribune in November last year, added Lee Enterprises’ North County Times, giving them control of the entire San Diego County market. The deal also includes the Californian, which serves southwest Riverside County.
The former Lee newspapers will join Manchester’s “multi-platform strategy” that includes television and online offerings that supplement the print products.
Lee got the North County Times as part of its $694 million acquisition of Howard Publications in 2002. Lee reported the sale price of the North County Times to the Manchester group as $11.95 million.
A Civitas Lesson
Versa Capital Management, a Philadelphia-based private equity firm that made its first newspaper acquisition in 2011, has taken control of Heartland Publications and created a new company: Civitas Media, LLC.
The newly formed company combines Versa’s four separate community newspaper companies.
Versa got into newspapers in 2011 when it bought the former Brown Publishing operations in western and northern Ohio. It then added the Wilkes-Barre (PA) Times Leader, several Midwestern newspapers owned by Freedom Communications and most recently the Heartland group, which includes 17 eastern dailies.
In total, Civitas owns 35 daily newspapers, 63 weeklies and a number of other publications across 12 states in the Midwest and Southeast.
Former Heartland CEO Michael Bush will lead the new company. Scott Champion, who was running the Ohio group, will be COO.
City of Roses Newspaper Co., which owns the Willamette Week in Oregon and the Santa Fe Reporter in New Mexico, looked across the country to make an acquisition of another alternative weekly.
City of Roses owners Richard Meeker and Mark Zusman added the Independent Weekly in Raleigh, North Carolina, a 29-year-old publication that was still owned by one of its founders. The western group did have at least one strong tie to the area, however: Meeker’s brother had been Raleigh’s mayor for 10 years.
In other alternative weekly news, a group of Village Voice executives bought its 13 newspapers in a deal that left the company’s online classified company with the former majority owners.
The newspapers, which include well-known titles such as the Village Voice, LA Weekly and Phoenix New Times, will now be owned in a company called Voice Media Group. Michael Lacey and Jim Larkin, the former majority owners of Village Voice Media Holdings, retained control of Backpage.com, the online classified operation.
The New York Times Company sold its About Group, which includes About.com, to Barry Diller’s IAC for $300 million in cash. About.com consists of more than 900 “topic sites,” featuring articles on a variety of subjects.
The New York Times has become considerably more focused in recent months. In early 2012 it completed the sale of its regional newspaper group to Halifax Media. In addition to its namesake publication, it continues to own the Boston Globe, the Worcester (MA) Telegram & Gazette and the International Herald Tribune.