As newspaper revenue falls, new owners look to acquire for power, consolidation, speculation
Papers are trading hands with more frequency as traditional owners leave the business or spin-off their print properties, but some business and political interests still see some value in owning the local daily newspaper
That the newspaper business is in trouble is no revelation. That it, and journalists, in general, are thought of poorly – only just better than Congressman and lawyers – is also not a surprise. But things may get much worse in 2016 as money interests look to scoop up news outlets that they believe could promote their interests.
With the newspaper business model broken, just who will want to own a newspaper property has come into question. For years papers dominated their local ad markets. Looking to grow that domination, newspaper companies constantly lobbied to be allowed to buy local broadcast properties, only to be thwarted by regulation. But many print media companies did buy TV stations, though usually in different markets. This diversification of holdings did well for companies like Gannett, the Tribune Company, Meredith and others, but with print products struggling some have chosen to spin-off their print holdings.
The question is who will want to scoop them up. For the past few years the answer has been private equity companies, other newspaper companies looking to buy up adjacent properties, or those interested in the political power perceived to be held in the printing press.
In San Diego, a real estate businessman thought it a good idea to acquire the San Diego Union-Tribune. As the Voice of San Diego said in late spring, Manchester wanted to “use the paper as a bullhorn for his interests – football, military, Republicans – and he wanted the sweet Mission Valley property on which the newspaper sits.”
The deal didn’t pan out for Manchester who later sold the newspaper for a loss, though Manchester hung on to the real estate, so it might turn out to have been worth while. (He later ended up buying the 8-acre Copley Foxhole estate in La Jolla for $17 million.) The buyer was Tribune Publishing who also own the Los Angeles Times, just up the I-5.
The question has always been whether it is the newspaper that gave some newspaper owners their power, or the money those paper generated that gave them their power. Is it an editorial or news story that can target a politician that makes them bow down to the will of the media baron, or the dollars slipped into their hands?
Sheldon Adelson appears to be testing this out now in both Las Vegas and in Connecticut. Reporters of his paper the Las Vegas Review-Journal, after successfully sniffing out the identity of their new owner, are now examining odd stories that have appeared in other papers.
Today, for instance, the Review-Journal’s website leads with a question: Who is Edward Clarkin? That is the name of the reporter who penned an article that appeared in The Bristol Press and New Britain Herald that seemed to target a Clary County judge. Why it would have appeared in Connecticut newspapers is odd, to say the least, as Clark County is home to Las Vegas? Of course, the answer may be that these papers have a tie to the company created by Sheldon Adelson, the new owner of the Las Vegas Review-Journal.
No one know who Edward Clarkin is, likely because no such person exists. The Hartford Courant did a great job explaining the mystery and providing the political background story. But we may never know the full story until someone decides to sue for defamation, as unlikely as that is.
The other end of the sale of the Las Vegas Review-Journal is New Media Investment Group, with had just bought the paper earlier this year. That company now has a rather odd relationship to the new owner, it will be contracted to manage the paper for Sheldon Adelson’s new company.
Today the Boston Globe looked at New Media and its backer, Fortress Investment Group LLC:
Along the way, GateHouse has earned a reputation for layoffs and cost cuts, as it became one of the largest news outlet owners in the industry. Today, its parent company, New Media Investment Group Inc., says it owns 575 publications in 32 states.
I’m not sure the Globe found out anything new, though it is nice to see someone (other than TNM) write about this growing company and ask questions about their motives behind their roll-up strategy.
It would nice to think that “freedom of the press” meant journalists can report on what they want, but that is not the case. It has always meant that those who own the press can do so, spiking stories at their whim if they do not like what they read. That the staff of the Las Vegas Review-Journal has so far published managed to publish their stories on the new ownership, and the mystery of the article that appeared in the Connecticut papers, is a testament to their professionalism.
But Mike Hengel, the top editor of the paper, has accepted a buyout, one offered shortly after the paper was sold. An editor will now be brought in by the new owners, one sure to be more friendly to the interests of ownership. But how influential will the new Review-Journal be is a tough question to answer.
Just recently Postmedia Network, the Canadian owners of the National Post and local newspapers, went all out to keep the Conservatives in power, only to see Canadians vote in the Liberals.
When papers begin to consolidate their newspaper holdings, they often decide to shutter some less profitable titles, merging them with other papers. This is the scenario playing out in Pennsylvania with Trib Total Media that announced recently that they would be closing of The Daily News in McKeesport and The Valley Independent in Monessen.
Now a group of investors have announced that they are looking to launch a new newspaper for their community.
Mid-Non Valley Publishing was founded to investigate whether they could buy The Valley Independent, but talks failed to result in a deal and Trib Total Media then announced it would close the paper, which had been publishing for over 113 years.
The group say they have enthusiastic support from the community and potential advertisers, though we shall see if this support materializes once the ad reps start calling. But for now the investor group is looking to find a print, with one possibility being Trib Total Media.
In California, there is still talk that the group of rejected by Tribune Publishing could still end up bidding on the LA Times and San Diego Union-Tribune. There is growing pressure on Tribune Publishing to turn around its results, though for now a sale of properties still seems far off.
Next year Tribune Publishing will be going to metered paywalls, a move that has taken all year to implement.