Sunday, March 9, 2014
PORTLAND - MaineToday Media will receive a multimillion-dollar loan that will enable it to pay down debt and fund an ambitious growth plan aimed at restoring its role as the state's leading news source.
S. Donald Sussman
The company announced Friday that it has reached terms with Maine Values LLC that includes the loan, valued at $3 million to $4 million.
Maine Values is owned by S. Donald Sussman of North Haven, a wealthy financier who is one of the state's leading philanthropists and political donors. Sussman, who is the husband of U.S. Rep. Chellie Pingree, D-Maine, will own a 5 percent equity stake in the company and have a seat on the board of directors.
MaineToday Media owns and operates The Portland Press Herald/Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville and the Coastal Journal in Bath, as well as digital properties including mainetoday.com, Maine Jobs and Raising Maine.
The closing of the deal has not been scheduled, but the parties said they want to finalize the deal as soon as possible.
In an interview, Sussman stressed that he won't be involved in the daily operations of the newspapers or in matters of hiring and news coverage.
Sussman has donated millions of dollars to charities and to struggling businesses around Maine over the past 20 years, often with little or no publicity. He became a high-profile figure during Pingree's re-election campaign in 2010, when his engagement to the congresswoman and his strong support of liberal and Democratic causes drew fire from Republican and conservative activists.
During the interview, Sussman said he has no intent of using his new position to advance his personal views. He said he sees the investment largely as a civic responsibility, not a business venture.
"I will have nothing to do with editorial policy and control or anything like that," he said.
He said he got involved only after being approached late last month by members of The Portland Newspaper Guild, who convinced him that the newspapers were at risk of closing without a quick infusion of cash.
"That was unthinkable to me," Sussman said.
"I believe a community's newspaper says a lot about the importance it places on education, democracy and working together to get things done," he said. "I am investing in and loaning working capital to MaineToday Media because I believe the communities it serves deserve healthy, financially stable daily newspapers that can help foster these values we all share. I want people to know that their local paper, the professional news they depend on and the jobs that come with it are here to stay. Employees and management have worked hard on an impressive growth plan. I am glad to be able to provide resources to fund that plan."
Portland's mayor, Michael Brennan, a Democrat, said he was relieved to learn that Maine's largest city will be able to retain its newspaper. Brennan said the newspaper's role as a forum for opinion, and for sharing information on matters that are important to the community, make it a critical fixture.
"I can't think of too many things that are more valuable," he said.
In a prepared statement, the MaineToday Media board of directors said that it does not expect any reductions in employment. MaineToday Media's work force now totals 430.
"We have tremendous faith in the editors and newsroom staff who have been hired by previous owners," said Peter Brodsky, MaineToday Media's board chairman. "They are dedicated journalists who have and will always do their jobs professionally and independently."
Brodsky said, "The board of directors has been looking for an investment partner who shares our commitment to MaineToday Media and is willing to invest in a modern, broadly supported growth strategy. We have found our partner in Donald Sussman and Maine Values LLC, and we are confident our employees, readers and business partners will be pleased."
Brodsky said the board will hire a top-notch chief executive with media experience. In the interim, Neil Heyside will be appointed CEO.
Heyside is a senior executive who leads the Performance Improvement practice for CRG Partners, a New York City firm that helps media companies and other industries restructure their operations.
A native of the United Kingdom who has worked with businesses around the world, Heyside has spent considerable time with MaineToday Media since last year, helping to develop a business plan to expand the company's Internet products and services for readers and advertisers.
Heyside said his goal will be to make the company the leading media organization in every community it serves.
"MTM is transitioning from a legacy newspaper print company to a multi-platform community media company," Heyside said in a prepared statement. "MTM will not only be positioned for sustained growth, but will also be a solid platform for developing other revenue streams. With investment in editorial resources and content creation, it will be strongly positioned to enhance further the quality of its print and online products."
The business plan developed by Heyside and management has the strong backing of The Portland Newspaper Guild, which represents many of the employees. Tom Bell, a Portland Press Herald staff writer and the president of the Guild, said union members are supportive of the new partnership with Maine Values LLC.
"Our members are partial owners of MaineToday Media through our employee stock ownership program," said Bell. "We have worked hard in partnership with management and the board of directors to help shape a plan to modernize our technology and strengthen this business. We are encouraged that Maine Values LLC supports that plan and is providing the resources to fund it."
The pending deal follows a period of consolidation and uncertainty for MaineToday Media.
In October, declining advertising revenue for the Press Herald led to 61 job cuts and buyouts, many of them in the newsroom. Those cuts were followed late in the month by the departure of Richard Connor, CEO of the company.
Connor, a Bangor native, was the catalyst for buying the distressed newspapers from The Seattle Times Co. in 2009. Connor left after undisclosed management conflicts with MaineToday Media's board.
The company's majority owner, Texas-based HM Capital Partners, then put the operation up for sale. Under the new financial arrangement, the private equity firm will remain the majority owner.
The new financing will make the company solvent again. MaineToday Media has an outstanding loan with a regional bank, RBS Citizens N.A. According to Sussman, debt has been renegotiated and will be made current with part of his proceeds.
The new money also will help the company pay other creditors, Sussman said, and the business plan being put in effect aims to make the company profitable.
The pending deal with Sussman ends a previous effort by other parties to purchase and operate MaineToday Media.
Last month, a group of investors that included media executive Chris Harte, a former Press Herald president, and Aaron Kushner, a businessman who two years ago tried to buy The Boston Globe, signed a letter of intent to become the majority owner of MaineToday Media.
The investors, called 2100 Trust, said they planned to put significant money into the newspapers. But Kushner and Harte were unable to come to final terms with management over a business plan, and their demands to cut wages and benefits and to change working conditions were rejected by Guild-represented employees.
"We thank the 2100 Trust for their serious interest in MaineToday Media," said Brodsky. "They are clearly committed to this industry."
Sussman's involvement in MaineToday Media is bound to generate renewed interest in his background and his business and civic dealings.
Sussman is a Florida native who lived in New York and first came to Maine on a sailing trip in 1992. He spent summers on Deer Isle, and he continues to help support two restaurants and other endeavors in Stonington. He also donated $1.5 million for an outpatient center at Blue Hill Memorial Hospital.
Sussman has worked in hedge fund and private equity investing for more than 30 years. He is founder and chief investment officer of a billion-dollar-plus investment fund based in Greenwich, Conn., Paloma Partners. Although he has been identified in media reports as being a billionaire, Sussman declined to specify his net worth, saying only that "it's substantial."
Sussman is a trustee or board member of several institutions, including the Foundation for Maine's Community Colleges, the Portland Museum of Art, the Investment Committee of Carnegie Hall and the University of the Virgin Islands.
Sussman has a strong interest in agriculture and conservation issues, and owns two organic farms: David's Folly Farm in Brooksville and Turner Farm in North Haven, where he lives with Pingree.
He has other real estate holdings in locations including Greenwich, Conn., New York City, Washington, D.C., and the Virgin Islands. In Portland, he owns several properties in the Hampshire Street area off Munjoy Hill.
Sussman, who will turn 66 in June, has given millions of dollars to charitable and civic institutions in Maine. He was named the Spurwink Humanitarian of the Year in 2011. He also received a Maine Philanthropy Award last year at Colby College.
Sussman married Pingree in June in a private ceremony at the couple's home in North Haven. They had met in 2007, and got engaged in 2008.
Staff Writer Tux Turkel can be contacted at 791-6462 or at: