3rd Quarter 2014
New Media Takes Providence: 2014 deal volume likely to surpass prior year numbers
A handful of daily newspapers changed hands in a relatively quiet third quarter, as a number of owners sought to expand their footprints in existing markets through daily and non-daily additions.
New Media Investment Group continued its growth in the largest deal of the quarter with the acquisition of the Providence Journal. David Black also added to his holdings in Hawaii and the Pacific Northwest.
Despite the lack of blockbuster transactions, 2014 is on track to surpass the prior year in terms of number of dailies sold and dollar volume.
New Media Investment Group acquired the 78,000-circulation Providence (RI) Journal in a $46 million transaction, creating a new flagship for the public newspaper company.
The Providence Journal, now the largest newspaper owned by New Media, came over from A. H. Belo Corp., which had owned Rhode Island’s premier newspaper since 1996. It had been independently owned prior to that.
New Media has been active in the acquisition arena since going public earlier this year. The company also acquired small-market dailies in Texas and Oklahoma owned by American Consolidated Media and a small-market daily in Virginia in a separate transaction.
New Media, the parent company of GateHouse Media, has a large presence in New England, including a group of papers in suburban Boston and dailies in southeastern Massachusetts: Fall River, New Bedford, Cape Cod and Taunton.
New Media now owns newspapers in 363 markets across 27 states. In addition to enhancing the print products, New Media’s strategy is to grow through selling digital marketing services and online advertising.
Big Island for Black
David Black’s Oahu Publications agreed to buy two dailies on Hawaii’s Big Island, further consolidating his hold on the state’s daily publications.
Oahu Publications, parent of the Honolulu Star-Advertiser, will acquire the Hawaii Tribune-Herald in Hilo and the West Hawaii Today in Kailua-Kona. Stephens Media had owned the dailies since 1993.
Black first came to Hawaii in 2000, buying Honolulu’s afternoon newspaper, the Honolulu Star-Bulletin, when its joint operating agreement with the larger Advertiser was being dissolved. He later acquired the Advertiser from Gannett and merged the two Honolulu dailies.
Last year Oahu Publications added Lee Enterprises’ daily Garden Island on Kauai. Oahu expects to keep the printing facility operating on the Big Island in the latest transaction.
Separately, Black’s Sound Publishing based in the Pacific Northwest acquired Stephens’ Aberdeen (WA) Daily World and three weekly newspapers in Washington state.
Adams Publishing Group, which entered the newspaper industry in March, added a competing twice-weekly newspaper in Athens, Ohio to its growing stable of publications.
Adams acquired the Athens NEWS, which was founded in 1977 as a bi-weekly alternative newspaper. The free-distribution product was increased to twice-weekly publishing in 1980. Adams plans to operate the NEWS separately from its daily Athens Messenger.
The Messenger was part of the platform acquisition in March, when it bought publishing divisions in northern Minnesota and Wisconsin, Ohio and Maryland from American Consolidated Media.
Separately, Adams added a weekly and shopper in Rice Lake, Wisconsin, near its holdings in that state.
John Georges, who bought the Baton Rouge (LA) Advocate last year, added four weekly newspapers in the region to expand coverage in southern Louisiana.
The Advocate acquired the Zachary Plainsman-News, The Watchman in East Feliciana Parish, the St. Francisville Democrat and the St. Helena Echo from Louisiana State Newspapers. The Advocate has been building its weekly stable, including a start-up in East Baton Rouge Parish.
Plans call for the Plainsman to become a free publication distributed to daily Advocate subscribers and to some non-subscriber households. The other three will be combined into a new paper called Advocate Extra and distributed as a supplement to Advocate readers in their communities.
Bay Minette Boogie
A South Carolina-based company owned by the Osteen family acquired a group of twice-weekly newspapers serving communities in the Alabama Gulf Coast.
The group includes paid publications in Fairhope, Foley, Bay Minette and Robertsdale in Baldwin County with total circulation of about 7,500. Robertsdale was the boyhood home of Apple CEO Tim Cook, whose father was a shipyard worker in the region. The Gulf Coast group also publishes visitor guides and other tourism-related publications.
The Osteens, whose family has owned the daily in Sumter, South Carolina for more than a century, have made several acquisitions outside their home state in recent years. The Gulf Coast group had been owned by Bern Mebane, former president of Multimedia Newspaper Company, for the past 14 years.
Brotherly Love in Philly
The publisher of the free daily Metro in Philadelphia acquired one of the city’s two alternative weeklies, City Paper, from the Rock family. Metro publishes free dailies in Philadelphia, Boston and New York.
Metro said the acquisition is part of its strategy in the U.S. to expand its offerings. The international company launched its first newspaper stateside 12 years ago.
Gannett completed its $1.8 billion acquisition of the 73% interest in Classified Ventures it didn’t already own, giving it full ownership of Cars.com.
Cars.com currently is the #2 auto-related website with about 30 million visits per month. The site displays some 4.3 million new and used cars from nearly 20,000 dealers. Gannett said the acquisition valued the company at 11.7x pro forma annualized 2014 EBITDA.
HD Media Co., owner of the Huntington (WV) Herald-Dispatch, acquired the nearby twice-weekly Wayne County News, companion shopper and commercial printing facility. HD Media owner Doug Reynolds bought the Huntington daily in 2013 from Champion Industries.