3rd Quarter 2011
Dispatch Co. gets bigger in Ohio
Longtime family owners make strategic acquisition in home Columbus market
The Dispatch Printing Company, owners of the Columbus Dispatch and major market television and radio, invested in its print flagship by buying a group of suburban weekly newspapers, magazines and digital assets in the Ohio capital.
The transaction was one of several significant deals in the third quarter, which also saw private equity firm Alden Global Capital expand its reach in the newspaper industry and another longtime family owner of a metro newspaper, the Oklahoman, exit the industry.
Separately, South Carolina’s Osteen family ventured outside their state and bought a group of non-daily newspapers in north Florida.
So far in 2011, nearly 40 daily newspapers have changed hands, making it already the most active year since the beginning of the recession in 2008.
The parent of the Columbus Dispatch acquired Community Media Enterprises (CME), publisher of 22 community newspapers serving suburban markets around Columbus, Columbus Monthly magazine, the monthly Columbus CEO magazine, a leading alternative weekly in Columbus and numerous digital holdings.
The suburban Columbus group had been owned by American Community Newspapers, which also owns suburban operations in Minneapolis-St. Paul, Dallas-Fort Worth and northern Virginia.
In making the acquisition, Dispatch Printing Co. officials said the combined operations would allow the company to provide a broader array of services to readers and advertisers, both in print and online. In addition to the Columbus Dispatch, the company publishes a number of suburban and niche products in the metro area.
The Wolfe family has owned the Columbus Dispatch since 1905. It is one of the largest newspapers in the U.S. that has been owned by multiple generations of the same family.
CME’s Suburban News Publications, the community newspaper group, has weekly circulation exceeding 240,000 in the Ohio capital’s most affluent and fastest-growing communities.
The alternative weekly, The Other Paper, was founded 21 years ago and has circulation of more than 43,000. Columbus Monthly, with paid monthly circulation of 32,750, is one of the largest city magazines in the country in terms of market penetration. Columbus CEO is the largest business magazine in Central Ohio, with requestor monthly circulation of more than 25,000.
The CME group was built by local owner Max Brown, who sold the operation to American Community Newspapers in 2007.
Later that year ACN was sold to a public company listed on the American Stock Exchange, and the debt load from that sale resulted in a bankruptcy filing. The company emerged from bankruptcy in July 2009, with the former lending group as owners of the equity.
Sunny in Sumter
A new company owned by members of the Sumter, South Carolina Osteen family bought a group of non-daily publications serving communities in northern Florida.
Brothers Graham, Kyle and Jack Osteen, the fifth generation of the family to own the daily Sumter (SC) Item, formed a separate company to acquire weekly newspapers in Ponte Vedra and Clay County, Florida, south and east of Jacksonville in the Sunshine State.
The deal includes the weekly Clay Today, Clay County Leader, Ponte Vedra Recorder, Car Connection (a weekly magazine serving Jacksonville-area auto dealers) and related websites.
The Florida group had been owned by Journal Community Publishing Group, Inc., a subsidiary of publicly traded Journal Communications, owner of the Milwaukee Journal.
Earlier, Journal Community Publishing sold non-daily publications in the Sarasota area, and this transaction completes the company’s Florida divestitures.
The Osteen family has more than 150 years of newspapering history in Sumter, and it has owned other publications in South Carolina. However, this is the first time the family has crossed the state line.
Art and Newspapers
While two other longtime newspaper families were growing in the third quarter, another made a surprise departure in a deal that involved a much larger collection of business assets.
The Oklahoma Publishing Co., owner of the 143,800-circulation Oklahoman in Oklahoma City and a number of other businesses, announced in mid-September that it had agreed to sell its assets to Denver-based Anschutz Corp.
In addition to the Oklahoman and the website NewsOK.com, the publishing company owns luxury resort hotels in Colorado and Texas; real estate holdings in Colorado, Texas and Oklahoma; a major manufacturer of concrete products; a manufacturer of breakfast food products; a scenic passenger train and an extensive art collection of American Western masters.
Denver businessman Philip Anschutz owns a small collection of newspapers, including the San Francisco Examiner and Washington Examiner, which are operated through Clarity Media Group.
However, these are dwarfed by his investments in movie theater operator Regal Entertainment Group, the Los Angeles Kings hockey team, the Los Angeles Lakers basketball team, major sports arenas, film production and many other businesses. Anschutz also has one of the largest private collections of American Western art.
Christy Everest, the third member of the Gaylord family to run the Oklahoma publishing company, said in published reports that Anschutz approached the company about a possible sale in June. Her grandfather helped to found the Oklahoman in 1903, four years before Oklahoma became a state.
Anschutz plans to operate the Oklahoman separately from Clarity Media.
Alden Goes All In
Alden Global Capital, one of the investors in debt of Journal Register Company, acquired the company in July.
A specialist in distressed debt, New York-based Alden has stakes in several other privately held newspaper companies, including MediaNews Group, Freedom Communications, Tribune Co. and the Philadelphia newspapers. It also has taken positions in public companies that own newspapers.
In September, MediaNews Group, the nation’s second largest newspaper company in circulation, announced that JRC head John Paton would become the chief executive officer of MediaNews as well.
In addition, the newly formed Digital First Media, a unit of JRC, will jointly manage MediaNews Group and JRC. Denver-based MediaNews Group publishes 57 daily newspapers.
Paton is one of the industry leaders in the transition of newspapers from principally print to the new media landscape.
Stephens Media Iowa LLC, which acquired the Ames (IA) Tribune and related publications in 2010, sold the operation’s non-strategic northern Iowa newspapers.
Gene Hall’s Hallmark Integrated Media of Charles City, Iowa bought the Algona Upper Des Moines and Reminder weekly newspapers. Stephens has made an additional acquisition to augment the central Iowa group since making the initial purchase late last year.
In addition, the former owners of several weekly newspapers in western Virginia bought them back along with several others through bankruptcy proceedings. The group includes weeklies in Salem, Radford and Christiansburg in the Roanoke area.