December 29, 2008

State officials optimistic as half a dozen prospects emerge to buy threatened newspapers

Both of these stories were written with reporter Jackie Majerus:

There are at least six potential buyers eyeing The Bristol Press, The Herald of New Britain and 11 weeklies, according to state and municipal officials who met Monday to discuss the looming closure of the newspapers.
“We are guardedly optimistic” that a deal might be struck, said state Economic Development Commissioner Joan McDonald.
Five of the six are already talking to the broker hired by the Journal Register Co. to try to sell the Central Connecticut papers slated to close in mid-January unless a new owner takes over, the officials said.
The other possible buyer, an anonymous New York newspaper veteran, met earlier in the day with the mayors of Bristol and New Britain. Both mayors expressed hope he might snatch up both dailies.
“We are pretty optimistic that this might materialize,” said Mayor Timothy Stewart of New Britain. “The prospects are pretty good that somebody will save these local papers.”
State lawmakers and economic development officials said their role in helping to land a buyer for the troubled newspaper chain is pretty much over unless someone asks for their assistance. Instead, they said, buyers and the broker hired to sell the papers are talking.
“We’re stepping back,” McDonald said.
It remains murky, though, who might be interested at a time when newspapers are taking it on the chin across much of America.
At least one is another newspaper company that responded to a letter sent out to 16 media firms by the state Department of Economic and Community Development, McDonald said. The Journal Inquirer of Manchester is also in the mix, according to Stewart.
Three of six prospects had been talking to the broker, the New Mexico-based Dirks, Van Essen & Murray. Another was put in touch with the broker through state Rep. Tim O’Brien, a New Britain Democrat. The other read about the papers’ plight and contacted the DECD, McDonald said.
The sixth prospect is the one the mayors spoke with in Stewart’s office Monday.
Both Stewart and Ward said the New York buyer is the most promising of all.
“He's most real,” said Stewart. “I think the prospects are pretty good here. They are looking to maintain that hometown nature.”
The mayors wouldn't name the individual from New York, but said he has many years experience as an editor, is not connected to any Connecticut paper and is not part of a newspaper chain.
“He does come from a strong background in journalism,” said Stewart. “He was very promising.”
Ward said he was “definitely, definitely interested” and has the financing in place to pull it off.
“Hopefully this will amount to something in the very near future,” Stewart said.Neither the JRC nor the broker has ever disclosed how much money they’re seeking for the papers. Officials said they would not name any potential buyers for fear of jeopardizing negotiations.
O'Brien said that he and other lawmakers working with McDonald’s office helped generate publicity that may have spurred interest from a buyer.
“Our efforts have succeeded in getting the word out to potential buyers," said O'Brien. "At this point, it's in their hands."
The five potential buyers who are speaking with the broker are "very much interested in doing something," said state Rep. Frank Nicastro, a Bristol Democrat.
"It appears that negotiations are getting serious," Nicastro said. “It's important that we move forward."
The mayors of New Britain and Bristol said they each spoke with some of the same prospective buyers, but that each of them had been contacted by other potential buyers who were interested in just one of the papers.
Stewart said he spoke with someone from the Journal Inquirer, but Ward said he had not. Stewart said the Manchester paper was interested in both the Press and the Herald and that it was still in the running as a buyer.
Nicastro said citizens need their newspapers. He said he's heard from many constituents about his work to help save the papers.
"The vast majority of the phone calls are saying, do what you can do to save the newspaper," said Nicastro. He said if people didn't like it, he would hear from them.
Even if, in the end, no buyer comes through, at least they tried, Nicastro said.
"This can't hurt," Nicastro said. "This can only help the citizens of Connecticut."
O'Brien also said that voters in his district are in favor of his work to save the papers.
"We would like to see our hometown papers preserved," said O'Brien, who said he is "hopeful" that a deal will be made.
Local newspapers are "centers of community life," said O'Brien. "Their loss would be felt very severely."
Deputy House Speaker Demetrios Giannaros, a Farmington Democrat, said the loss of the state's daily and weekly papers threatened – and some already closed – by the Journal Register Co. means the "dismantling of local reporting for most of Connecticut."
Giannaros paraphrased Thomas Jefferson's comment about preferring a world without government over a world without newspapers. He said citizens like him who have become elected leaders often are in place because people have learned about them through coverage in local papers.
"It's a democratic process that must be maintained," said Giannaros.
State Rep.-elect Chris Wright of Bristol said he hopes it works out because losing the papers would be a blow to democracy. "How can you have a free press if there's no press?" he asked.
Selling the papers, though, has not proven an easy process.
Stewart said the records kept by the JRC that are being shown to prospective buyers are turning some of them away.
"The books aren't the greatest," said Stewart. "That's part of the issue."
Some of the concern, said Stewart, is whether the paper is viable. But he said a major stumbling block is that there just isn't enough information in the books to make a reasonable judgment about the business.
Former Bristol mayoral contender Ken Johnson, who was part of a group that considered buying the Press, said that “the lack of information from the seller has been a primary impediment to submitting any purchase offer.”
Johnson said the broker “actually felt compelled to apologize for the lack of information.”
Another complication, said Stewart, is that that the Journal Register Co. papers are so intertwined that it is complicated to sort out the truth about any particular newspaper.
Since the JRC notified employees in Bristol and New Britain on Nov. 11 that it intended to close the papers in 60 days, it has shuttered many weekly papers in southern Connecticut and Pennsylvania. The company is heavily in debt and its stock is worth less than a penny a share.]
The newspaper industry as a whole is reeling, with many papers struggling to remain afloat in the face of shrinking circulations and declining advertising. People are shifting their attention online, where newspapers frequently have as many readers as ever, but profits are elusive.
“It’s a challenging time” for newspapers, McDonald said.

Here's a sidebar about the state DECD's effort to find potential buyers:
State economic development officials reached out this month to potential buyers as part of an attempt to save more than a dozen threatened newspapers in Connecticut.
Commissioner Joan McDonald of the Department of Economic and Community Development said her office wrote to possible newspaper buyers to see if any had interest in buying The Bristol Press, The Herald of New Britain or any of the 11 weekly papers owed by the Journal Register Co.
"Our role is of a facilitator," said McDonald. "We sent 16 letters out. That was national as well as local."
The Journal Register Company told employees last month that it would close the papers – putting about 100 people out of work – if no buyer is found by mid-January.
In the letter, which is signed by McDonald, she wrote, "Many of these publications have intrinsic value to the communities in which they serve, and so the state is interested in working with potential buyers in an effort to keep and grow these important business operations in Connecticut."
The commissioner said she was asked by Gov. Jodi Rell to see how the state could help find a buyer and said the DECD helps businesses and organizations all over the state. She provided the newspaper companies with contact information for the New Mexico broker who was hired by the Journal Register Co. to handle any sale and for the DECD representative who would work with any potential buyer.
Her agency could provide "technical assistance, low-cost financing opportunities, and access to tax incentives for economic development projects, as well as assistance with site planning, environmental and regulatory issues, training, exporting, and research," McDonald wrote.
According to information provided by McDonald's office, letters went to the following companies: Gannett Co. Inc., Hearst Newspapers, Tribune Co., Cox Newspapers, Gatehouse Media, Herald Media, Landmark Communications, Lee Enterprises, The New York Times Co., News Corp., The E.W. Scripps Co., Community Newspaper Holdings, Inc. and Advance Publications, Inc.
In Connecticut, the letters went to the Journal Inquirer of Manchester, the Record-Journal of Meriden and the The Republican-American of Waterbury.
On Monday, McDonald and some of her staff met in Hartford with representatives from Bristol and New Britain about the efforts to save the papers.
Once a prospective buyer connects with the newspaper broker, said McDonald, the state isn't actively involved and isn't privy to the details of the negotiations, including whether any potential buyer is interested in one of the daily papers, both dailies, a weekly or a combination of papers.
She stressed that the mid-January deadline to sell or close the papers is imposed by the Journal Register Co., not by the state or any potential buyer. If negotiations are "bearing fruit," McDonald said, she supposed there might be some "wiggle room" to extend the deadline a little bit.
She said the deadline is not impacting the due diligence her office is doing to check into any potential deal.
They do a "detailed economic analysis," said McDonald, examining the investment a company might make in property, equipment or jobs, as well as the financial impact the deal has on Connecticut, before putting any offer of help on the table.
"We can offer low interest loans, dependent on the number of jobs retained or created," said McDonald.
McDonald said the state can also help with breaks when a company buys new equipment or needs employee training.
"All of these programs are available to any business," said Rep. Tim O'Brien, a New Britain Democrat.
Rep. Frank Nicastro, a Bristol Democrat, said he's doing what his constituents want by helping the papers.
"This is not a bailout. We're talking about incentives," said Nicastro.

Here's a copy of the letter the state Department of Economic and Community Development Commissioner Joan McDonald sent to 16 newspaper companies:

Dear Mr. XXX:

As you may be aware, newspaper publisher Journal Register Company recently announced it is seeking buyers for several of its daily and weekly newspaper publications. In Connecticut, these newspapers include The Herald, The Bristol Press, and 11 weekly publications.

Many of these publications have intrinsic value to the communities in which they serve, and so the state is interested in working with potential buyers in an effort to keep and grow these important business operations in Connecticut. Governor M. Jodi Rell has asked the Connecticut Department of Economic and Community Development (DECD) to reach out to businesses such as yours to determine your interest in acquiring any of these publications and to see if we may help in any way.

DECD is a state agency that provides technical and financial assistance to businesses and organizations throughout Connecticut. The department is a one-stop business resource that matches company needs with many programs and services. DECD can provide technical assistance, low-cost financing opportunities, and access to tax incentives for economic development projects, as well as assistance with site planning, environmental and regulatory issues, training, exporting, and research. To learn more about how we help Connecticut’s businesses grow, visit
www.YouBelonginCT.com.

The firm of Dirks, Van Essen & Murray from Santa Fe, New Mexico has been retained by the Journal Register Company to help manage the process of seeking buyers. The state point of contact is Peter Lent in DECD’s Office of Business and Industry Development. He can be reached at 860-270-8046 or
peter.lent@ct.gov.

I encourage you to explore this possible opportunity and to contact us to see how we may be of assistance.

Sincerely,

Joan McDonald
Commissioner


One little note: The mayors of New Britain and Bristol said they met with the unidentified New York prospect at 11 a.m. Monday for about 45 minutes. They said the man had met earlier with Ed Gunderson, publisher of The Herald and The Bristol Press.

The photograph of Stewart and Ward is from CT News Junkie's wonderful website. Here's the link to her story.
I'll add links to other news stories as I run across them.
Here is a story in The Hartford Courant.
The Republican-American of Waterbury has a story here.
Rep. Tim O'Brien weighs in here, which includes video of Channel 61's story.
The Associated Press wrote a story, too.
*******
Copyright 2008. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com

3 comments:

Concerned Conservative said...

THE GOOD:
Some of the concern, said Stewart, is whether the paper is viable.

THE BAD:
Rep. Frank Nicastro, a Bristol Democrat, said he's doing what his constituents want by helping the papers.
"This is not a bailout. We're talking about incentives," said Nicastro.

AND THE UGLY:
The commissioner said she was asked by Gov. Jodi Rell to see how the state could help find a buyer and said the DECD helps businesses and organizations all over the state.

WE'RE TRAVELING DOWN A SLIPPERY SLOPE.

AnonymousWestconnStudent said...

Concerned Conservative:

Please, PLEASE define that slippery slope for me. Because unless it's some free market fantasy this is a very good thing, that will keep an economic market (among other things) alive in Bristol.

Anonymous said...

Mayor Ward should make a significant contribution to keep the Press in business: it is his major PR tool!