2nd Quarter 2014
New Media Adds in Southwest: Newly public owner of GateHouse Media aims to grow in local
Acquisition activity was brisk in the second quarter as several growth-oriented newspaper companies added to their portfolios of local content.
New Media Investment Group, which had a highly successful public offering earlier this year, expanded at the end of the second quarter with the acquisition of a Texas-based community newspaper and shopper group.
In addition, Halifax Media Group established a foothold in the Northeast, and newly established Adams Publishing Group tacked on small-market newspapers in Minnesota.
In total through the first six months of 2014, 29 daily newspapers have changed hands in deal volume worth just under $400 million.
New Media Meets Old West
New Media acquired the remaining newspapers of American Consolidated Media in a transaction that included five daily newspapers, nine weeklies and a large shopper group.
Earlier this year, ACM sold its newspapers in Maryland, Ohio, Minnesota and Wisconsin to Adams Publishing Group, which established Adams’ publishing platform.
The newspapers involved in the New Media deal included the Stephenville Empire-Tribune, Brownwood Bulletin and Waxahachie Daily Light in central Texas, as well as a publishing cluster based in northeastern Oklahoma. Stephenville bills itself as the “Cowboy Capital of the World.”
In addition, the transaction included a shopper group with weekly distribution of approximately 225,000 serving fast-growing markets in the Rio Grande Valley of south Texas.
Separately, New Media acquired the Petersburg (VA) Progress-Index from Scranton, Pennsylvania-based Times-Shamrock Communications.
New Media now owns newspapers in 362 markets across 26 states. In addition to enhancing the print products, New Media’s strategy is to grow through selling digital marketing services and online advertising.
Halifax Heads North
Halifax Media Group, whose newspapers are located principally in the Southeast, made its first foray above the Mason-Dixon Line with its acquisition of the Worcester (MA) Telegram & Gazette.
The 51,200-circulation Worcester newspaper joined its former companion newspapers from the New York Times Co. at Halifax – although its route was not as direct.
Halifax acquired the New York Times Regional Newspaper Group in early 2012, which consisted primarily of mid-sized daily newspapers in Florida, Alabama, North Carolina and other states in the Southeast. The New York Times sold the Worcester daily along with the Boston Globe to John Henry’s newly formed Boston Globe Media Partners in 2013.
Henry’s company will be focusing on the Boston Globe and the eastern end of Massachusetts. The Worcester Telegram & Gazette is the dominant newspaper in central Massachusetts. Halifax now owns 35 newspapers in five states, including 24 dailies.
Local Roots in MN
Adams Publishing Group added newspapers in southern Minnesota to its growing company with the acquisition of publishing operations owned by Huckle Media. The transaction included the Faribault Daily News and Owatonna People’s Press.
In March, Adams established its newspaper company by buying publishing divisions in northern Minnesota and Wisconsin, Ohio and Maryland from American Consolidated Media. Founder Stephen Adams is a Minnesota native.
In addition to the newly established newspaper company, the Adams group includes the nation’s largest privately held outdoor advertising company and Good Sam Enterprises
Hear Ye, Hear Ye
Tribune Co.’s Baltimore Sun group continued its regional expansion with the acquisition of two daily newspapers and related publications – the Annapolis (MD) Capital Gazette and Carroll County (MD) Times – from Landmark Media Enterprises. Earlier this year, the group added the alternative weekly Baltimore City Paper.
The state capital of Annapolis is located south of Baltimore, while the Carroll County Gazette, located in Westminster, serves growing markets to the northwest of Baltimore. This regional publishing group now controls much of eastern Maryland.
The Capital Gazette is one of the oldest newspapers in the country. It traces its roots to 1727 and the founding of the Maryland Gazette.
The Capital Gazette had been fully owned by Landmark since 2007. Prior to that, Landmark had owned the paper jointly with Philip Merrill, who died in 2006. Landmark acquired the Carroll County Times in 1974. Tribune plans to spin off its newspapers into a separate public company later this year.
Anchored in Anchorage
McClatchy Co. sold the Anchorage Daily News to local owners in a $34 million transaction that included the Daily News’ headquarters building.
The new owner is Alice Rogoff’s Alaska Dispatch Publishing, LLC, which publishes the AlaskaDispatch.com news website in Anchorage. Rogoff, a former chief financial officer of U.S. News and World Report, became majority owner of Alaska Dispatch in 2009, about a year after its founding.
Following the transaction, Alaska Dispatch planned to sell the Daily News building and become a tenant.
McClatchy acquired 80% ownership of the Anchorage Daily News in 1979, which was its first newspaper outside California. McClatchy won a tough fight against the larger Anchorage Times and built the Daily News into the largest newspaper in the state.
Shuffling in Buffalo
A weekly newspaper owner made a consolidation play in the greater Buffalo area by acquiring Metro Group, which reaches more than 250,000 households with community newspapers and shoppers in the region.
James Austin, a career newspaperman who recently made his first acquisition with the Angola (NY) Pennysaver, added Metro Group to his company, Community Papers of Western New York. Metro Group publications include the Source group of newspapers, the Hamburg Sun, Springville Journal, Gowanda News and specialty publications.
Metro Group had been owned by Bernard Bradpiece and Denny Guastaferro, who assembled the group through acquisitions and start-ups over the past 14 years.
The Sound and the Fury
Boone Newspapers continued to grow in the second quarter with the addition of the Oxford (MS) Eagle, home of Ole Miss and novelist William Faulkner. In the first quarter, Boone bought the Salisbury (NC) Post, and the company was very busy in 2013.
The Oxford newspaper had been owned by the same families since 1961, when it was acquired by a former linotype operator, a shop foreman and bookkeeper. Members of the two remaining families – Phillips and Goolsby/Vasilyev – left their operating posts at the newspaper upon the sale.
Boone owns a number of other newspapers in Mississippi, including the Vicksburg Post, Picayune Item and Natchez Democrat, where Boone’s chief executive officer, Todd Carpenter, makes his home.
‘Wolves at the Door
Minnesota billionaire Glen Taylor, owner of the NBA’s Timberwolves and dozens of other companies, bought the Minneapolis Star Tribune from a private equity firm and many of its other former creditors.
Taylor plans to keep the newspaper’s management team in place, including Michael Klingensmith, who has guided the Star Tribune into a transition that embraces the digital world while maintaining a strong print product. The Star Tribune won two Pulitzer Prizes in 2013.
McClatchy bought the Star Tribune in 1998 from the Cowles family, then sold it to Avista Capital Partners in 2006. Burdened with debt from that acquisition, the Star Tribune entered bankruptcy in 2009 and emerged owned by its former creditors.
Taylor owns Taylor Corp., a privately held printing and marketing concern based in North Mankato. He also owns numerous other companies. In addition to the Timberwolves, he also owns the WNBA’s Minnesota Lynx.
Lenfest Takes Philly
One of the local investors who owned the Philadelphia Inquirer and Daily News ended up as sole owner after buying out his partners in the venture.
In late May, co-owners H.F. “Gerry” Lenfest and Lewis Katz won a court-ordered “private” auction with the other co-owners of the newspapers, valuing the operation at $88 million. Four days later, Katz died in a private-plane crash, and his share reverted to his son, who agreed to sell to Lenfest.
Lenfest and Katz were part of a group of local businessmen who acquired the newspapers two years ago. In recent months, relations among the owners had turned litigious, and the auction was ordered by the court to settle the disputes.
Lenfest, 83, sold his cable company to Comcast in 1999 and since has been a major philanthropist in Philadelphia and elsewhere. Lenfest said he plans to bring in additional investors to ensure longevity of ownership of the Philadelphia newspapers.
The Battle of Fredericksburg
The principal lender to the Fredericksburg (VA) Free Lance-Star won a bankruptcy auction for the 39,000-circulation daily newspaper and area radio stations formerly owned by the Rowe family.
The auction attracted a number of newspaper industry bidders, but the lender, Sandton Capital Partners, submitted the high bid of $30.2 million.
Free Lance-Star Publishing Co. took on debt in 2007 with a conventional bank to build a new printing facility; Sandton acquired that debt in 2013. FLS Publishing has been operating under bankruptcy protection since January 2014.
10/13 Communications expanded its holdings in the greater Tucson market in separate second quarter acquisitions.
The company bought the leading alternative weekly, Tucson Weekly, and its sister publication, Inside Tucson Business, from Wick Communications. In addition, it added three other local publications serving small communities in the region.
10/13 Communications, owned principally by Randy Miller and Arne Hoel, owns suburban operations in Tucson, Phoenix, Dallas and Houston. Its primary publications in Tucson are those in the Explorer group.
The Dunn-Rankin family’s Sun Coast Media Group acquired the Sebring (FL) News-Sun from Halifax Media Group. Halifax got the newspaper as part of a larger acquisition involving the Leesburg Daily Commercial in 2013.
Morris Publishing Group bought the Tell-N-Sell shopper in Savannah, Georgia, where Morris is headquartered and owns the daily Savannah Morning News. The Tell-N-Sell is a paid, weekly classified newspaper distributed regionally.