The new year came with this dramatic news:
McClatchy Sells Star-Tribune for Half of Purchase Price
Yes, McClatchy sold the Minneapolis Star-Tribune for less than half the company paid for the newspaper in 1999.
Avista Capital Partners will purchase the newspaper for $530 million.
“Proceeds from this tax-advantaged sale will enable McClatchy to reduce debt, improve the company’s financial performance, and provide increased flexibility to capitalize on new opportunities in the newspaper industry, including digital investments. The company has no plans to divest further newspapers,” according to McClatchy.
Avista also owns half of Thompson Publishing and has a stake in the cable company WideOpenWest.
Avista’s other investments are primarily in the oil industry.
Well, these are the new realities of the newspaper business.
If you are a public company, your investors want action.
And money, money, money.
Perhaps The New York Times can resists for a while the sale of the Boston Globe, but at the end of the day, the Boston Globe will be sold.
They want to get more than 500 million dollars (less than half of what they paid for the Globe).
Sorry, but they will not get this amount of money.
Today in The Washington Post a Freedom Communications executive says that he likes private-equity ownership of newspapers
“Media companies in transition should be private,” says Scott N. Flanders, president of Freedom Communications, owner of the Orange County Register iun Santa Ana, California.
“When you’re privately backed, you have the flexibility to be nimble.”
The Register journalists who’ve come from publicly traded newspapers tell Frank Ahrens that even though their paper doesn’t face Wall Street’s quarterly demands, it sometimes feels like it does.
“There is no illusion that we are immune to market pressures because our company isn’t traded on a stock market,” says reporter Andrew Galvin.
Well, the metropolitan newspapers are going to suffer more than the rest of the papers.
Private ownership and local brands have more future than the public and big ones.
The Tribune group must be very worried.
They control almost only big metropolitan papers.
The Chicago Tribune and Los Angeles Times are in real trouble.
Not Newsday that has more local penetration.