Thursday, May 23, 2013
PORTLAND — A group of investors led by former Portland Press Herald President Chris Harte intends to become the majority owner of MaineToday Media, the Press Herald’s parent company.
THE NEWS RELEASE
The investment was announced in the following news release:
MaineToday Media agrees on terms for new capital investment:
Deal would strengthen current operating and future growth at state's largest media company
Portland, Maine — MaineToday Media Inc. today announced it had reached terms that would result in significant new capital investment to strengthen current operating and future growth at the state's largest media company with a new group of investors led by former Portland Press Herald President Chris Harte and the 2100 Trust, LLC.
On behalf of the Board of Directors, MaineToday Media Chairman Peter Brodsky welcomed the new partners and new capital investment. "The people who work at MaineToday Media perform important work that is vital to Maine communities," said Brodsky. "Chris Harte and his team are clearly committed and passionate about growing and strengthening the company and we look forward to completing the deal as quickly as possible."
"MaineToday Media is one of the strongest and most diverse media companies in the region, and presents many opportunities to reach the residents of Maine," said Harte, who was president of The Portland Press Herald from 1992 to 1994. "We are acutely aware of the history and impact these newspapers have had on their communities and our most important job will be meeting the high bar that has been set. Our goal is to invest and grow this business by delivering professional, trusted news to Maine people."
The 2100 trust, led by founder Aaron Kushner, Harte and media executive Jack Griffin, has spent a year assembling a group of New England-based investors and media executives who understand the critical role newspapers play in our community and are committed to re-invigorating them with fresh ideas, capital and disciplined management.
MaineToday Media owns and operates The Portland Press Herald, the Maine Sunday Telegram, the Kennebec Journal, the Morning Sentinel, and the Coastal Journal, as well as digital properties such as mainetoday.com and Maine Jobs and Raising Maine.
The term sheet represents the intent of both parties to finalize and sign a deal as quickly as possible and all parties are moving forward with standard due diligence work. Upon closing the transaction, 2100 Trust would operate MTM's properties with a team made up of current management and other experienced media industry professionals. More details will be available at the time of closing.
The group, 2100 Trust LLC, which includes Harte, Aaron Kushner and former Time Inc. CEO Jack Griffin, has signed a letter of intent and the deal could be completed by next month, company officials said Friday.
If the deal goes through, Harte said, the investors intend to put significant money into the company, which has dealt with several rounds of staffing cuts in recent years.
“We’re excited about the opportunity to invest new capital in the four papers,” Harte said, referring to The Portland Press Herald/Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville and the weekly Coastal Journal in Bath.
“MaineToday Media is one of the strongest and most diverse media companies in the region and presents many opportunities to reach the residents of Maine,” Harte said. “We are acutely aware of the history and impact these newspapers have had on their communities, and our most important job will be meeting the high bar that has been set.”
The parties wouldn’t discuss financial details of the agreement. But HM Capital, a Texas-based private-equity firm that’s now the majority owner, will retain a stake in the company, said MaineToday Media Chairman Peter Brodsky.
“It’s terrific news,” said the company’s chief financial officer, Patrick Sweeney. “It brings a lot of relief to a financially challenged company.”
HM Capital, which bought the company in 2009, began looking for new investors late last year after CEO Richard Connor resigned. Connor spearheaded HM Capital’s purchase of the newspapers from the Seattle Times Co.
HM Capital contacted about three dozen prospective investment groups and negotiated with multiple interested parties before choosing 2100 Trust, Sweeney said.
The investment group would come to MaineToday Media with significant experience and money.
Harte most recently was publisher and chairman of the Star Tribune Co. in Minneapolis, one of the 15 largest newspapers in the country. He was president of the Press Herald from 1992 to 1994.
Kushner, who tried to buy The Boston Globe in 2010, owns Massachusetts-based Marian Heath Greeting Cards. Before that, he founded and sold MyMove.com, a website that allowed people to change their addresses on the Internet.
Harte said that even during the turbulent 2000s, most newspapers made profits. But some couldn’t service the amount of debt they had taken on and had to close or make cuts.
His group plans to take on no new debt, he said, and plans to reinvest in the newspapers to show advertisers and the community that they’re getting the highest quality product.
“We definitely intend to invest in the product significantly,” Harte said. “Newspapers are an incredibly important element of any community. A strong newspaper makes a community stronger. … We’re going to help the existing team to make these newspapers as strong as ever.”
The letter of intent calls for a period of “due diligence,” which began last week. Representatives of 2100 Trust have spent the past two weeks at the newspapers, examining each division.
The agreement calls for about a month of due diligence, but that’s a flexible timeline, Sweeney said.
Once the investors finish the due diligence, it would likely take another two or three weeks to complete the specifics of the deal, Sweeney said.
Harte, Sweeney and Brodsky all said they expect the sale to happen.
Tom Bell, president of the Portland Newspaper Guild, the largest union within MaineToday Media, called the announcement of new investors “great news.”
He said he hadn’t spoken to the investors directly, but they know they must invest in technology and the newsroom to make the newspapers profitable, Bell said.
“We’re ready to embrace change. We’re going into this with an open mind and a positive attitude,” he said.
2100 Trust first made headlines in the newspaper industry in 2010, when it tried to buy The Boston Globe from The New York Times.
According to a news release Friday, 2100 Trust spent a year assembling a group of New England-based investors and media executives who “are committed to re-invigorating (newspapers) with fresh ideas, capital and disciplined management.”
Harte wouldn’t say Friday whether the group is still interested in buying the Globe.
William Huff, a former president of the Globe, is helping 2100 Trust as it evaluates MaineToday Media.
His future role with the company hasn’t been determined, Harte said.
Jason Singer can be reached at 791-6437 or at: