Monday, March 10, 2014
An investment group led by Bangor native Richard L. Connor purchased the Portland Press Herald/Maine Sunday Telegram on Monday, vowing ''a business strategy'' that will ''further strengthen'' the newspaper.
The sale caps a 15-month effort by the debt-laden Seattle Times Co. to sell its media holdings in Maine. The purchase by Connor's group, MaineToday Media Inc., includes the Kennebec Journal in Augusta and the Morning Sentinel in Waterville, the MaineToday Web sites and niche print publications. Together they employ roughly 500 people.
Connor, who will serve as editor and publisher of all three daily newspapers in the purchase, believes that if the papers are not profitable immediately, they will be by the end of the year.
''I've known these papers my entire life and understand their considerable value as critical information sources within their communities and throughout the state,'' Connor said in a news release announcing the sale. ''Importantly, we have developed a business strategy through which we expect to further strengthen the papers and MaineToday.com for the benefit of our readers and advertisers.''
The sale price was not disclosed, although analysts have speculated that it's a fraction of the estimated $230 million that The Seattle Times Co. paid for the properties 11 years ago.
''It's one of the sadder days of my career,'' said Frank A. Blethen, Seattle Times publisher and chief executive officer. ''Given what's happened in the economy, it just became very important to us to get focused on Washington state.
''The saving grace for us is that there is a local owner. It's going to be run by somebody that's a Maine native and has some special sensitivity to Maine.''
The new owner plans to sell three downtown properties -- the office building at 390 Congress St., the former press building at 385 Congress St. and a parking structure on Chestnut Street -- that were part of the media transaction. Connor said one prospective buyer is very interested and two others have expressed interest.
The buildings are being shown to a prospective buyer today, he said, but purchase agreements could not go forward until the company changed hands.
Some of the newspaper's work force will be relocated to the company's facilities off Cummings Road in South Portland, where the printing press is located, and some departments will remain in downtown Portland in leased space, Connor said. He said he is looking at potential sites later this week.
The sale comes at a pivotal time. The nation's media industry is being buffeted by the twin storms of a lingering recession and an Internet-driven shift away from traditional advertising and readership habits. Declining circulation and ad revenue have led owners to cut staff, reduce coverage and, in some instances, cease publishing.
In this environment, Connor struggled for months to line up investors willing to look beyond today's gloom. His sales pitch: Maine is a market that wants local news and local advertising, and an entrepreneur able to buy the papers and their valuable real estate for a bargain price, cut costs through labor concessions and innovative marketing, and form a partnership with workers could attract readers and advertisers.
This community-oriented formula can make the venture profitable, Connor maintained. As an example, he pointed to the financial success he said he's having at The Times Leader in Wilkes-Barre, Pa., where he is editor and publisher.
WON'T MIMIC OTHER NEWSPAPER
Now Connor must adopt his approach in Maine, though he insists that the Maine newspapers will not be remade into a clone of his Wilkes-Barre newspaper.
''I don't think you would find a lot of similarities in the newspapers I've edited, other than a strong emphasis on local news,'' Connor said. ''And with that local news, I'm not just talking about writing and reporting -- photography, lots of people's pictures in the paper. That would be similar, but no, I don't have a cookie cutter.''
The news operation he will take over evolved over time into the dominant source of information in southern and central Maine. The properties have languished, though, with falling revenue and circulation, multiple cutbacks and leadership inertia during the drawn-out sale process. Connor will try to restore a sense of energy and purpose, not only among workers, but with advertisers and readers.
He will be challenged to stabilize print readership, which has been declining for much of the decade. In March 2001, Press Herald circulation stood at 70,924 daily; the Telegram was at 115,313, according to Audit Bureau of Circulations figures. The daily number fell to 68,587 in September 2007, and to 59,009 in March of this year. Sunday circulation dropped from 105,872 two years ago to 90,524 in March, the audit bureau reported.
Readership has been exploding on the Internet, however.
Monthly page views for pressherald.com have roughly tripled since July 2007, when the newsroom took over management of the site from MaineToday, reaching 4.6 million in May. The number of visits to the site in a typical month has doubled during that period, and the number of unique visitors has grown by about 50 percent.
MaineToday Media is led by Connor, with private equity financing coming largely from HM Capital Partners in Dallas, which also is an investor in Connor's newspaper in Wilkes-Barre. The Portland branch of Citizens Bank has contributed financing.
Connor originally had set out to buy the papers in a partnership that included a widely known trio of Maine businessmen: William Cohen, a former U.S. senator and defense secretary; Robert Baldacci, brother of Gov. John Baldacci; and Michael Liberty, a former Portland developer. None of these men is now involved in the purchase, but Connor said he has consulted Robert Baldacci about real estate values and prospective buyers for the buildings.
The sale was contingent on the newspaper unions approving new contracts that include 10 percent wage cuts and a suspension of pension contributions. In exchange, the workers were given a 15 percent share of any increase in the value of the company and seats on the company's board of directors.
Tom Bell, president of the Portland Newspaper Guild -- the company's largest union -- said the sale's culmination is good news for workers because it ends the uncertainty surrounding ownership for the past 15 months.
''I think a lot of the employees are both anxious and excited,'' Bell said. ''We're telling our members 'Think of this as the first day on a new job.' ''
TRADITION OF QUALITY JOURNALISM
Connor takes over the remnants of a media company with an ambitious past.
The empire built by Guy Gannett and his descendants had grown by 1993 to include five Maine newspapers, television stations in four states and other enterprises. The Gannett era ended in 1998, when the family decided to sell and the newspapers were purchased by another family-run enterprise, The Seattle Times Co.
Publisher Frank Blethen, whose ancestors had moved west from Maine, saw the purchase as a way to reconnect with his family's heritage. A strong advocate for local journalism, Blethen maintained a level of investment that allowed the newspapers to continue their tradition of award-winning coverage.
For instance, the newspapers sent a reporter and photographer to Iraq three times to report on the activities of Maine troops, and the Press Herald/Telegram repeatedly won New England Newspaper of the Year awards in their circulation category.
Outgoing Editor and Vice President Jeannine Guttman praised the commitment of the Gannett and Blethen families to public service journalism.
''With their stewardship, this newspaper's hallmark was meaningful, compelling journalism that made a difference in Maine people's lives,'' Guttman said in a memo to staff Monday. ''With their financial support, our newsroom initiated important enterprise and investigative reporting projects that shed light and prompted solutions.''
But The Seattle Times took on heavy debt to buy the Maine newspapers. The impact of the recession, coupled with financial trouble in Seattle, forced Blethen to announce in March 2008 that it needed to sell its Maine properties.
Connor began exploring the purchase of the newspapers last summer. Had they not been in Maine, he said, he would have given up on the complex sale, which eventually involved votes on contract concessions by all of the company's unions.
LONG HISTORY IN NEWS MEDIA
Ownership of the Maine newspapers will allow him to return to his native state as more than just a visitor for the first time since he embarked on a career in newspapers 41 years ago.
Connor took his first newspaper job as a reporting intern at the Jackson Citizen-Patriot in Jackson, Mich., between his junior and senior years in college because he needed the money. He went on to become managing editor of the Hillsdale Daily News in Hillsdale, Mich., at the age of 21.
Connor also has been publisher of the Fort Worth (Texas) Star-Telegram, and in the 1990s he founded a company that owned two dailies and 70 weeklies in four states.
In 2006, Connor assembled a group of investors to purchase the Times Leader in Wilkes-Barre from the McClatchy Co. for $65 million. The investors formed Wilkes-Barre Publishing Co., which also owns four weeklies in Pennsylvania. Connor is the company's chief executive officer.
The Press Herald/Telegram will be the largest newspaper he owns.
Thirty-one non-union employees, including many senior managers, had their jobs eliminated Monday with the sale, and Connor said future cuts might cost 100 more employees their jobs.
Despite the cuts, Connor is confident that the remaining staff will continue to produce a high-quality product.
''I think the people who are at the paper today, who will be there tomorrow, are all capable of putting it out,'' he said in a phone interview Monday, adding that he believes even a leaner newspaper can produce more local news.
''I believe that individuals oftentimes can do more than they think they can, or perhaps more than they've been asked to do. We ask a lot and lead by example,'' he said of his management team, some of whom will be in Maine as consultants to help with the transition. ''Quite frankly, we give it everything we've got every day.''
Staff Writer David Hench can be contacted at 791-6327 or at:
Staff Writer Tux Turkel can be contacted at 791-6462 or at: