Newspaper company Digital First Media says it will ‘explore strategic alternatives’
The newspaper chain Digital First Media, a combination of the Journal Register Company and MediaNews Group, said today that its “its Board of Directors has initiated a process to evaluate and consider strategic alternatives for the Company’s business.”
The company said its is looking at all options including selling the company whole, or in parts.
“As a result, we believe we have many options available to us to maximize the value of our businesses for our stockholders, and the Board of Directors has therefore decided to assess the full range of those opportunities,” ohn Paton, the company’s CEO wrote
Obviously, the company will be open to offers from any quarter. One might find a private equity firm enter the picture, or some of the properties sold off individually.
Digital First Media is a large chain, made up of many newspaper that serve very attractive markets. In its portfolio one finds the Denver Post, a collection of newspapers that serve the Los Angeles area, as well as a Bay Area newspaper group that surrounds San Francisco serving Contra Costa, Alameda, Santa Clara and San Mateo counties.
Some of these newspaper, if sold off, have already changed hands numerous times in the past decade of two. The Contra Costa Times, for instance, was founded and published for years by Lesher Communications. The paper, along with sister papers, were sold off following the death of Dean Lesher, to Knight-Ridder which at the time owned the San Jose Mercury News. McClatchy then bought Knight-Ridder in 2006 for $4.5 billion, but needed to divest many of the properties and so sold off the Bay Area newspapers to Dean Singleton’s MediaNews Group, which had to take out a $350 million load to complete the deal. In 2010 MediaNews filed Chapter 11 bankruptcy protection, and in 2013 the company merged into Digital First Media.
The other part of the company that makes up Digital First Media derives from the Journal Register Company. That company filed for Chapter 11 bankruptcy in 2009, and again in 2012.
Since 2010, the company has maintained an advisory board that includes Jeff Jarvis and Jay Rosen. DFM is controlled by the hedge fund Alden Global Capital.
Update: DFM CEO John Paton has written a memo to staff explaining what the company is doing. You can read the whole thing at Jim Romenesko’s website, but here is the part I found interesting:
DFM is a company with a successful strategy that drives results. And that means we now have options – options that we should now review to determine what is best for our future.
After a rocky five years, the newspaper industry is firmly back on its feet again.
Many of the largest companies in the media business have spun off their publishing assets and they have been well received by the public markets with healthy balance sheets and plans to drive their digital future and the capacity to grow.
Other than the usual die-hard skeptics, it is now a given that newspapers, as multi-platform news organizations, will thrive in the future as the best and biggest providers of local news and advertising in their markets.
But scale is the key to that future. Scale to build the products our customers want. The products we will need in the future for news or sales will look nothing like they do now. Any newspaper company’s future will rely upon its ability to build those products fast and as cost-effectively as possible.
So, we are now reviewing all of those options – those strategic alternatives – that best position our company for the future.
Wow, what can one say? “successful strategy that drives results?” “the newspaper industry is firmly back on its feet again?” OK, I get it, he wants to follow Rob Ford as next mayor of Toronto and he is practicing his speeches. This would be comical were it not for the fact that a lot of people will soon be losing their jobs… yet again.