Media

Detroit News' Owner Will Consider Selling Its Newspapers Nationwide

September 12, 2014, 1:38 PM

Digital First Media, owner of The Detroit News, The Denver Post and The San Jose Mercury News, is considering a sale of its newspaper properties and possibly of its entire company, CEO John Paton said Friday morning, Hadas Gold reports at Politico.

The announcement, coming in a period of rapid change in the declining newspaper industry, will heighten speculation about the future of the News and Free Press, which are yoked together in a business relationship that is believed to be unprofitable. 

"[W]e 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,” Paton says in a statement.

"The news information industry in America is undergoing a period of seismic change, defined by the need to consolidate to rapidly compete in a digital world," he adds. "The companies that will succeed are those which have meaningful scale and digital expertise. By anticipating the rapid revolution in our industry and responding to stay ahead of the curve, DFM has clearly emerged as a leading player, based on the high quality of our assets and the extensive work we have done to transform them into multi-platform products."

Paton publicly posts a separate memo to employees. "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.," he adds there.

Digital First Media is the second-largest newspaper owner in the country with 76 daily and 160 weekly publications. Speculation about a sale first came in April, when the company axed what was known as the Tunderdome project: a plan to create a centralized, digital-first, news-content partnership that was aimed at gathering nonlocal news and distributing it throughout the company’s network of local papers.

The Detroit News, in a story attributed to Digital First Media, reports Paton said the company has retained UBS Securities to review a full range of alternatives — including selling the entire company, selling regional clusters or doing nothing.

A comp[any statement says there are no assurances that the process will result in a transaction or transactions. The company also said that it will not disclose developments in the process until the board decides how to will proceed.

A hedge fund, Alden Global Capital, controls the company.

The Detroit News is published by the Detroit Media Partnership under a joint operating agreement with Gannett Co., owner of the Free Press, which exercises majority control of media partnership.

Gannett, based in Virginia, is in the process of divorcing its more profitable television stations and digital products from its less profitable newspapers.

The company also has made news recently with announcements that a number of its papers are undergoing restructuring that involves renaming newsroom positions and having existing employees reapply for jobs. Some Gannett papers have seen reductions in staff by as much as 15 percent, including the elimination of copy editors, who read stories that are turned in by reporters.

Gannett is calling the effort the “Newsroom of the Future” project, which has been ridiculed by commentators who cover the newspaper industry.

No announcements have been made at the Free Press, but staffers expect the ax to fall next year, when the paper's contract with the Newspaper Guild expires. Over the past several years the Free Press has shed numerous positions with buyouts, layoffs and attrition.


Read more:  Politico


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