2nd Quarter 2011
Brown papers sold in Ohio
Private equity firm enters newspaper industry with regional publishing group
A group of small-market Ohio newspapers will serve as a new print platform for Versa Capital Management, a Philadelphia-based private equity firm making its first foray into the fourth estate.
The sale of the newspaper group, formerly owned by Brown Publishing, was the largest deal in the second quarter that also saw two publishers expand regional clusters and the formation of another new newspaper company.
The privately held Observer Group added another title to its western Florida group, while MediaNews Group continued its growth.
And Sherman Frederick, the former head of Stephens Media, started his own venture with an acquisition from his old outfit.
Versa’s acquisition of the former Brown Publishing newspapers gives them a sizeable geographic cluster covering rural and exurban communities in western and northern Ohio.
The group consists of 14 dailies, more than 30 weekly newspapers and a collection of shoppers and niche publications clustered around central printing facilities. The daily newspapers include the Sidney Daily News, Delaware Gazette, Troy Daily News, Wilmington News Journal and Washington Court House Record-Herald, among others.
The Ohio group, as well as other publications formerly owned by Brown Publishing, had been taken over by Brown’s senior lenders in 2010 following a bankruptcy auction.
The lenders established a new company, Ohio Community Media, and Versa will continue to operate the newspapers under that name. It is the first newspaper acquisition for Versa, which also owns a restaurant chain, parking decks and Polartec, among other investments.
The Ohio deal was the last in a series of transactions in which Brown’s former lenders divested of the company’s publications.
Previously Ohio Community Media had sold business and other publications in Des Moines, Iowa; Salt Lake City, Utah; Fort Worth, Texas; Naperville, Illinois; South Carolina; and Colorado.
To run the Ohio group, Versa brought in Scott Champion, a former executive with Liberty Group Publishing, GateHouse Media and other newspaper companies.
The Brown family had gotten its start in newspapering in 1920 and had grown through acquisition beginning principally in the mid-1990s. (See related story: Brown becomes Ohio Community Media.)
Observer Takes Siesta (Key)
Family-owned Observer Group, Inc. acquired the weekly Pelican Press and related operations in the Sarasota, Florida area, augmenting its existing publications in the region.
Based in Siesta Key, the 40-year-old Pelican Press and companion Pelican Press Marketplace are distributed each week to approximately 35,000 homes. Together with the Observer newspapers, the Observer Group will now reach nearly 125,000 homes a week.
The Pelican Press had been owned by a subsidiary of Journal Communications, owner of the Milwaukee Journal and a community newspaper group. Journal Communications said it decided to sell the Sarasota operation in order to focus on its Wisconsin newspapers.
Matt Walsh, his wife Lisa, her parents and a small group of investors teamed up in 1995 to buy the Longboat Observer from its founders to get the Observer Group started.
Now it has grown into a significant company with six newspapers, three websites and a quarterly arts and social magazine. The company has three newspapers in the Sarasota area, one on the east coast of Florida in Palm Coast/Flagler County and the Gulf Coast Business Review, a paid weekly with subscribers from Tampa to Naples.
Although the company has just a 15-year history, the family’s involvement in newspapers stretches several generations.
Lisa Walsh’s parents, David and Ruth Beliles, began their newspaper careers in the 1950s in Illinois. David Beliles eventually became a vice president of Stauffer Communications. His father had been a circulation executive in the 1940s and 1950s.
Matt and Lisa Walsh began their newspaper careers at the Topeka (KS) Capital-Journal after graduating from the University of Missouri School of Journalism. They moved through the Miami Herald, Florida Trend magazine and other publications before launching the Observer Group.
Gardner Joins Larger Plot
The family owners of the Gardner (MA) News have agreed to sell the newspaper to the neighboring Lowell Publishing Co., a subsidiary of MediaNews Group.
The 5,500-circulation daily will join MediaNews’ cluster in north-central Massachusetts, which includes the Lowell Sun, Fitchburg Sentinel & Enterprise and a weekly group in the Nashoba Valley.
Gardner is known locally as “Chair City,” due to its roots in furniture manufacturing and the pioneering of several famous styles of chairs. The Hubbard and Bell families have owned the Gardner News since 1921. Alberta S. Bell has been president and publisher of then newspaper since 1992.
In the Battle
The former head of Stephens Media Group has started a new publishing company with the acquisition of two newspapers from his former employer.
Sherman Frederick’s new company, Battle Born Media, bought two non-dailies, the Ely Times and Eureka Sentinel, both in Nevada. Frederick had been publisher of Stephens’ Las Vegas Review-Journal and CEO of Stephens Media before his recent retirement from the company.
Frederick’s partners in Battle Born are Tim Dahlberg, a national sports columnist for the Associated Press; and Tom Smith of Glendale, Arizona.
A shopper publisher on Long Island, New York has bought the Maryland Pennysaver serving suburban Baltimore. All Island Media, which was acquired late last year by private equity firm Wafra Partners, says the Maryland operation is part of its growth strategy to make the company a pre-eminent shopper publisher and provider of local advertising services. The Maryland Pennysaver is mailed weekly to more than 830,000 homes in eastern Maryland. All Island now has circulation of nearly 1.7 million.
The Maryland Pennysaver was sold in early 2010 to a new company managed by private equity firm Blackstreet Capital. It is one of the largest weekly shoppers in the country.
McClatchy Co.’s Raleigh (NC) News & Observer expanded its community newspaper group with the acquisition of the Clayton News-Star. Raleigh’s non-daily group will now consist of 10 publications.
Local owner Stewart McLeod had owned and operated the Clayton News-Star since 1997. The newspaper is celebrating its 100th anniversary this year.
McClatchy will add a Sunday edition of the News-Star and increase the distribution of the newspaper. It also plans to alter the circulation areas of its other community newspapers in order to optimize coverage in the region.