June 30, 2020

Remember when there were 14 publicly traded newspaper companies, independent or family-controlled, a number run by journalists? I do. That’s how many I encountered at my first New York City media investors conference in December 2001.

A short stroll down memory lane seems in order this week because two of the remaining public companies — with 40 metro and regional dailies between them — could effectively pass into private hedge fund control as soon as Wednesday.

As I wrote recently, Wednesday is when Alden Global Capital, freed from a standstill agreement, can add to its one-third holding and acquire a controlling share of Tribune Publishing stock. July 1 is also the date bids are due in federal bankruptcy court for McClatchy. Chatham Asset Management holds most of the company’s secured debt and thus has the inside track to taking ownership.

Those scenarios are likely to play out over weeks or even months, but if completed will leave just four public newspaper companies: the financially robust New York Times Company, along with Gannett, Lee Enterprises and A.H. Belo, the latter three with stock trading for less than $2.

The lineup 18-and-a-half years ago at the Plaza Hotel (also prospering at the time) represented a substantial majority of the industry as measured either by revenue or circulation. Stocks were doing fine. Many companies had strong local broadcast divisions. Except for the beginning of killer competition from online classified services like Monster and Craigslist, digital was a non-factor.

These were the companies, along with a brief sketch of each then and now:

The New York Times Company: The chairman was Arthur Sulzberger Jr., ebullient about the paper’s own-the-story coverage of 9/11 and its aftermath. The Times Co. owned The Boston Globe (later sold to John Henry) and a group of regional papers, mostly in the South, that later went through several owners and are now part of Gannett.

Dow Jones & Company: It consisted of The Wall Street Journal and a cluster of financial information services. The CEO was former reporter and editor Peter Kann. The Bancroft family, whose class of family voting stock gave them control, sold the company to Rupert Murdoch’s News Corp for $5 billion in 2007.

The Washington Post: Don Graham, groomed since his teenage years to take over the family business including a stretch as a reporter and editor, was CEO. The company had small but very profitable local broadcast and cable divisions and included the fast-growing Kaplan education business. Graham and his niece, Post publisher Katharine Weymouth, decided to sell the Post to Amazon founder Jeff Bezos in 2013, thinking he was better positioned than they were to invest in digital transformation.

Gannett: Then, as now, it owned the most newspapers. Al Neuharth, who founded USA Today and built Gannett into the biggest newspaper company in the country, was still an influence but had passed the CEO mantle to his chief financial executive, Doug McCorkindale. Gannett’s TV division, later spun off as Tegna, was becoming the bigger part of the company.

Tribune Publishing: It was a juggernaut after its purchase the previous year of the Times Mirror Company — the Los Angeles Times and related broadcast properties — for $8.3 billion. Jack Fuller, the former editor of the Chicago Tribune, was CEO of its publishing arm. The CEO was financial executive John Madigan, to be succeeded in a few years by TV executive Dennis FitzSimons. A controlling share of the company was later sold to real estate investor Sam Zell and then to Chicago entrepreneur Michael Ferro.

Knight Ridder: Neither the namesake Knights nor the Ridders had voting control of the company, though family member Tony Ridder later became CEO. As at Tribune and Gannett, there was only one type of stock — all shares had equal voting rights. Knight Ridder was one of the first companies to experience friction with its editors over downsizing. Three investment groups accumulated over a third of the company’s stock and pressed for a sale. The company was sold to McClatchy in 2006.

The E.W. Scripps Company: It was another family-controlled company that had started in newspapers then branched into television. Alone among the group, it had developed a successful cable production business, launching the Food Network and several other lifestyle channels. Those and the local broadcast division were eventually spun off. The rest of the company sold to Gannett in 2015.

The McClatchy Company: It has owned newspapers only and was the most prominent of a tier of smaller companies. It had aspirations to grow from its California roots and had acquired papers in Raleigh, North Carolina, and Minneapolis before plunging in to buy the much larger Knight Ridder in 2006. Debt from that transaction was a drag for more than a decade. The company sought bankruptcy reorganization earlier this year, relinquishing 163 years of family control.

Media General: It was a collection of newspaper and broadcast properties based in Richmond, Virginia. Nearly all the newspapers were sold to Warren Buffett’s BH Media in 2012. After Buffett lost faith in newspaper prospects, BH Media was sold in turn to Lee Enterprises early in 2020.

Lee Enterprises: It’s a collection of smaller papers, based in Davenport, Iowa, known for its proficient sales organization. A survivor. Most papers are in the Midwest or West.

Pulitzer, Inc.: It was controlled by the family for whom the prizes are named. Besides the St. Louis Post-Dispatch, the company’s only other big holding was the Arizona Daily Star of Tucson. The company was sold to Lee in 2005.

A.H. Belo Corporation: It owns The Dallas Morning News and once owned a strong television division and papers in Providence, Rhode Island, and Riverside, California. It was controlled by heirs of founder A.H. Belo. Everything but the Morning News has been spun off or sold.

Journal Communications: Later known as Journal Media Group, its TV holdings grew and soon outpaced its one metro newspaper, the Milwaukee Journal Sentinel. The Journal Sentinel was sold to Scripps, which sold its newspapers soon after to Gannett.

Journal Register: Another collection of small newspaper clusters, it was a forerunner of Alden’s MediaNews Group chain and proudly a cheapskate even back then. The CEO once bragged to Forbes about the practice of checking reporters’ odometers to make sure they were not padding expenses.

As this short history suggests, many of the companies split in half when their growing and highly profitable broadcast holdings were being dragged down in stock market value by stagnant newspaper divisions.

A few diversified private media companies — Hearst and Advance Local spring to mind — continue to maintain substantial newspaper/digital divisions. But others, like the Morris or Cox chains, have vanished or been pared back.

Last week brought a detailed update of Penny Abernathy’s work at the University of North Carolina at Chapel Hill, detailing the disappearance of 2,100 newspapers so far since 2004, most of them weeklies. Concurrently “news deserts” and “ghost newspapers” have proliferated.

That is one important dimension of the financial crisis in local news. Maybe my metro roots are showing, but I am just as alarmed when large and mid-sized dailies become “a shadow of their former selves,” as the phrase goes.

The Chicago Tribune, Miami Herald and the 38 others are probably not going to be slashed overnight even further than they have been.

It will be another sad tipping point, however, if they pass on to the tender mercies of hedge fund owners.

Rick Edmonds is Poynter’s media business analyst. He can be reached at redmonds@poynter.org.

This article has been updated to clarify the recent history of both Tribune Publishing and Knight Ridder.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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