April 2020 Report
Steady Activity in First Quarter
Several small papers change hands as Lee takes over BH Media Group
The year got off to a steady start, with several small dailies and weeklies sold during the first quarter and the announcement that Lee Enterprises was acquiring BH Media Group (BHMG) in a deal financed by BHMG parent Berkshire Hathaway.
In late January, Lee Enterprises, which has publishing operations in 50 markets, entered into an agreement with Berkshire Hathaway to acquire BH Media Group’s publications and The Buffalo (NY) News for $140 million in cash. BH Media Group was formed in 2012 and quickly grew through frequent acquisitions during the next several years.
BHMG operates newspapers in 10 states, including 30 dailies and more than 49 paid weekly publications. The Buffalo (NY) News was separately owned by Berkshire Hathaway. Lee Enterprises had already been managing the BHMG newspapers under a management agreement since July 2018.
Berkshire Hathaway provided $576 million in long-term financing to Lee at a 9% annual rate and without any performance covenants. The financing paid for the acquisition, refinancing of Lee’s approximately $400 million of existing debt, and provided enough cash to allow for the termination of Lee’s revolving credit facility. When the deal closed in March, Berkshire Hathaway became Lee’s only lender. BHMG’s real estate and cash were excluded from the acquisition and Lee entered into a 10-year lease on the buildings.
It was anticipated the deal would drive an 87% increase in Lee’s revenue and a 40% increase in adjusted EBITDA, immediately reducing leverage to 3.4x before synergies.
Lee Enterprises Sells Two Clusters
On the other side of the ledger, Lee Enterprises sold properties in Oregon and California during the first quarter.
In January, Country Media, Inc. acquired the daily Coos Bay (OR) World, the weekly Bandon (OR) Western World and the weekly Umpqua Post in Reedsport, Oregon. The newspapers were sold by Southwest Oregon Publishing Co., a wholly owned subsidiary of Lee Enterprises, which has owned the Coos Bay newspaper group since 2005 when it acquired Pulitzer, Inc.
Country Media is a 20-year-old, family-owned company based in Salem, Oregon. The company bought the Del Norte Triplicate and Curry Coastal Pilot in Oregon from Western Communications last July.
Country Media also owns non-daily community newspapers serving Lincoln City, Tillamook, Manzanita, Cannon Beach, Clatskanie and St. Helens, Oregon; Langdon and Bowman, North Dakota; and Baker, Montana.
“We certainly had not set out to buy additional newspaper companies so soon after settling into Brookings and Crescent City,” said Country Media president Steve Hungerford. “But when approached with the opportunity to purchase The World and its two sister publications, it was a logical fit with our other news media on the Oregon coast. We’ll now have more people and resources available to make our individual publications here even stronger.”
In a separate transaction in March, Lee sold its newspapers in Santa Maria and Hanford, California to Santa Maria News Media.
This newly formed company is led by a group of Canadian newspaper executives that have newspaper assets throughout Canada and the United States. Their California newspapers include the Bakersfield Californian, Sonora Union Democrat, Porterville Recorder, Marysville Appeal-Democrat, Imperial Valley Press, Lodi News-Sentinel and the Antelope Valley Press.
In addition to the two daily newspapers, the transaction included eight companion weekly publications. The cluster’s websites reach more than 500,000 unique visitors each month.
Red Wing Sells Big Fish Works
MediaNews Group acquired the assets of Minnesota-based Red Wing Publishing Company.
Red Wing Publishing Company, a family-owned company that has been in operation for more than 50 years, is the parent of Big Fish Works, which operates three clusters across Minnesota: Crow River Media in the central part of the state, International Falls/North Star in the northeastern corner and Southwest News Media to the west of Minneapolis. MediaNews Group operates the nearby St. Paul Pioneer Press.
Big Fish operates 11 community newspapers, a digital marketing agency and two commercial printing facilities. The markets served, including Hutchinson, International Falls, and Savage, are among some of the fastest growing in the state of Minnesota.
Paxton Expands in Indiana
Paxton Media Group acquired the 182-year-old Madison Courier in Madison, Indiana. The 4,500-circulation newspaper had been owned by the Garber family for six generations.
The Courier serves an historic riverfront market experiencing significant economic development. Projects underway include a new hotel and conference center, a manufacturing headquarters and new apartment complex – all in historic buildings that previously were vacant.
Paxton Media Group owns more than 70 newspapers across the Midwest and Southeast, including 12 other dailies in Indiana.
Times Media Group Adds in Arizona
Times Media Group, which publishes community weekly newspapers and websites throughout Arizona and California, has acquired The Foothills Focus, a community news weekly based in New River, Arizona.
The acquisition brings its weekly circulation in the greater Phoenix area to 285,000 printed copies.
Times Media Group has been aggressively expanding its reach and footprint, mostly through the acquisition of other similar media groups. Last year, Times Media Group acquired several high-profile news titles in the Los Angeles and San Diego areas, including the Downtown Los Angeles News, the Pasadena Weekly, the Argonaut, and the Ventura County Reporter.
Swift Communications Sells Colorado Daily
Swift Communications sold the Greeley (CO) Tribune to MediaNews Group. MediaNews Group’s other Colorado newspapers include The Denver Post, the Loveland Reporter-Herald, the Longmont Times-Call, and the Boulder Daily Camera.
Founded in 1870 by Nathan Meeker, the Greeley Tribune was purchased in 1977 by Swift Communications.
Long Beach Business Journal Sold
George Economides sold the Long Beach Business Journal to John Molina of Pacific Community Media. Economides founded the bi-weekly Long Beach Business Journal more than 30 years ago.
Pacific Community Media is a subsidiary of the Long Beach-based Pacific 6 Enterprises, which purchased the Long Beach Post in 2018. Pacific 6 is a partnership among six local business leaders, including John Molina, the former chief financial officer of Molina Healthcare, Inc., and Todd Lemmis, who sits on the boards of the Long Beach Convention and Visitor’s Bureau and the Downtown Long Beach Alliance.
Paddock Adds Chamber Guides and Weekly
Paddock Publications’ Town Square Publications division acquired Kansas-based Metro-Media. With the addition, Town Square is now the country’s largest publisher of chamber of commerce guides.
Metro-Media owned and published a large suburban group of weekly newspapers in and around Kansas City for several years prior to selling the group in the 90s to Lionheart Newspapers, founded by Richard Connor.
The acquisition is part of Paddock’s strategy to diversify its revenue base beyond newspapers. The company became employee-owned in 2018.
Paddock publishes several newspapers in Illinois, including 11 community publications in the central part of the state and nine in southern Illinois. Its largest newspaper is the Daily Herald in Arlington Heights.
In February, Paddock added the weekly Moultrie County News-Progress in Sullivan to its central Illinois cluster. The weekly newspaper and its companion countywide shopper were acquired from Best Newspapers Inc., a family-owned operation that had owned the News-Progress since 1961.
Schneps Acquires Metro Properties
Schneps Media, which acquired amNewYork from Newsday last year, acquired the free dailies Metro New York and Metro Philadelphia from Metro US.
The acquisition positioned Schneps Media as a leading media company in the New York City market, as it was now able to combine the two largest circulated daily newspapers into one, amNewYork METRO. The merged publication has weekday circulation of 175,000 copies, which is more than double any other major metro daily circulated in New York City each weekday.
Schneps owns more than 30 newspapers, 28 magazines and specialty publications and 20 websites. It also produces numerous podcasts and hosts 50 annual events. Among its publications are Queens Weekly, Bayside Times, The Villager, and the Long Island Press.
Coastal Bend Publishing, a division of McElvy Media Group, took ownership of five weekly newspapers from family-owned Beeville Publishing Company. The papers include the Beeville Bee-Picayune, the Advance-Guard Press, the News of San Patricio, the Progress and Karnes Countywide.
O’Rourke Media Group purchased the weekly Ripon (WI) Commonwealth Press from the Lyke family. At the same time, the Lykes sold its Ripon Printers division to Walsworth, a Missouri-based commercial printing company. From 2012 to 2017, the Commonwealth Press was named Weekly Newspaper of the Year six times in the WNA Foundation Better Newspaper Contest.
The twice-weekly Greenville (IL) Advocate was sold to family-owned Centralia Publishing Ltd., which owns several newspapers in adjacent counties in central Illinois. The Greenville Advocate was established in 1858 and is the oldest business in Bond County.
Centralia Publishing also publishes the Centralia Morning Sentinel, Mt. Vernon Morning Sentinel, Salem Times-Commoner and Carlyle Union Banner, and operates the WCXO radio station in Carlyle. It has been owned by the Joy and Perrine families since 1888 and is currently in its fifth generation of family ownership.