Gazette for sale?

Thu, Nov 18, 2010


In an interesting blog this morning on Poynter, respected media analyst (i.e,, knowledgeable industry gossip) Rick Edmonds reported that “Barely eight months after emerging from bankruptcy, Freedom Communications, parent of the Orange County Register has put all its newspapers and television stations on the block.”

Freedom owns the Gazette – so does that mean our local rag is being shopped to the highest bidder?

I didn’t put in a call to Gazette publisher Steve Pope to ask, relying instead on this statement from Freedom’s corporate office, as quoted by Edmonds.

“Freedom has always been regularly approached regarding strategic opportunities. This is a normal part of business and, as expected, has continued following the company’s successful restructuring. It is the company’s fiduciary responsibility to review and evaluate these opportunities as they arise.”

The short answer is yes. If a buyer comes along, the Gazette’s sale will take place just as briskly and effectively as the recent firing of CU football coach Dan Hawkins.

A few years ago, media properties were the darlings of Wall Street. Daily newspapers, with a virtual monopoly on local advertising, regularly boasted EBITDA of 40 percent or more. Entrepreneurial companies such as tribune Media, Gannett, and Media News Group acquired dailies by the score, building billion – dollar empires headquartered in gleaming signature buildings.

When the New York Times Company bought the Boston Globe for $1.2 billion in the early 1990s, it seemed like a great deal – until it wasn’t.

This year, the Times tried to sell the Globe. There were no bidders, even though the asking price was reportedly around $35 million.

Media companies, including the Times, loaded themselves with so much debt that they couldn’t easily weather the steep revenue declines caused both by the recession and by advertiser migration to internet platforms such as Craigslist.

It may be that the industry’s business model is now useless.

While chain ownership may be useful for small specialty pubs such as this one (which is owned, along with 30 – something other small media properties, by the Minneapolis based Dolan Company) it may not make sense for medium-sized dailies such as the Gazette.

The Gazette generates substantial revenue streams, has the city’s dominant website, and has resources that no competitor can easily match.

Local ownership would magnify the newspaper’s reach, power, and profitability.

Imagine the daily if it controlled its own destiny.

No more revenue being funneled upstream to fund ‘corporate,’ no distant bureaucracy to send out absurd dictates, no more compulsory outsourcing, no more big shots parachuting in to demand wholesale change – and no prospect of it ever happening.

The buck would stop at the editor/publisher’s offices. They’d be able to make quick decisions, to respond instantly to the market, to invest in their own product, to build relationships in the community for the long term, and to rebuild their somewhat tattered community image.

So who might be out there trying to put together a local group of investors?

Gazette publisher Steve Pope would have the inside track, if he’s interested. No one knows the paper better than the guy who’s been running it for the last couple of years, and Pope may have a few bucks of his own to put in the deal. Indy publisher John Weiss has always dreamed of owning the Gazette, and our local alt-weekly’s success may convince possible investors that the Indy team knows how to run a paper.

But if I were a betting man, I’d put my money on the single smartest guy in the newspaper business: Dean Singleton of Media News Group.

Dean managed to keep his company together despite bankruptcy and industry collapse, and remains a player when most of the others have long since gone bust. It makes sense for Media News to buy the Gazette – and remember that they already co-operate in a number of areas.

Most importantly, Media News has a modern printing facility that was built to print both the Post and the now-defunct Rocky Mountain News. The Gazette’s presses were old and decrepit before Gutenberg was born, so moving the print facilities to Denver makes perfect sense.

And the reborn company could then abandon its dismal home on Prospect Street, and move downtown to, say, the ground floor of the USOC building, in convenient walking distance to downtown’s finest watering holes.

Wayne, Rich, Jeff, Steve, Dave, Daniel, John, Barry – if it happens, I’ll buy you one at the bar of your choice.

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