Monday December 19th, 2011. WALL STREET JOURNAL, New York Times Co. said it is in advanced discussions to sell 16 local newspapers that make up the company's Regional Media Group to Halifax Media Holdings LLC.Besides the Sarasota Herald-Tribune, the regional media group includes the Lakeland Ledger, Gainesville Sun, the Ocala Star-Banner, the Winter Haven News Chief, the Santa Rosa (Calif.) Press-Democrat, the Wilmington (N.C.) Star News and other papers in California, Louisiana, Alabama and South Carolina.
The Times's Regional Media Group of 16 has a combined weekday circulation of over 400,000. The group's revenue in 2010 was $277 million. Craig Huber, a senior analyst at independent stock-research company Access 342, estimates the group could fetch up to $360 million, based on his estimate of the group's earnings.
Local papers like the ones in the regional group, (SARASOTA HERALD TRIBUNE) have been hit particularly hard by the advertising downturn because the cornerstone of their business, classified advertising, has mostly moved online. Advertising revenue in the group declined 9.7% to $36.8 million in the most recent quarter while total revenue in the group was down 7% to about $60 million.
In the second quarter, Times Co. recorded a $161.3 million non-cash charge primarily related to a write-down of assets in the group. Over the last few years, Times Co. has sold assets and made other aggressive moves to relieve mounting financial pressure as revenue declines throughout the company threatened its ability to pay down debt. The company sold all or parts of various assets including its headquarters building and its stake in the holding company of the Boston Red Sox. It also borrowed $250 million from Mexican billionaire Carlos Slim.
Of the latest sale, Mr. Huber said, "They're doing it because they're just trying to sell off assets to become even more solvent. All the company cares about at the end of the day is keeping afloat the flagship New York Times newspaper for the long-term. Everything else in my opinion could be and would be put up for sale."
Bill Warner Sarasota Private Investigator, SEX, CRIME, CHEATERS & TERRORISM at www.wbipi.com