The owner of the Portland Press Herald is buying Sun Media Group, the company that publishes Lewiston’s Sun Journal and a host of weekly newspapers.
Reade Brower of Camden has entered into an agreement for an undisclosed price with the Costello family, which has operated the company that publishes the Sun Journal since the 1890s.
The sale dramatically expands Brower’s holdings, bringing many of Maine’s newspapers, including most of its dailies, under his ownership. Brower’s move to expand his media footprint and keep the Sun Journal under local control contrasts with what is occurring in most media markets, where newspapers are increasingly owned by national chains that consolidate operations and cut costs in a bid to seek profitability.
Sun Media Group employs 225 people at its newspapers and commercial printing operation. It includes the daily Sun Journal, the Forecaster and Current Publishing weekly newspapers in southern and coastal Maine, seven other weekly publications in western Maine, and three magazines.
Brower is buying Sun Media Group under a new company, SJ Acquisition, which will operate separately from MaineToday Media, which has media properties that include the Portland Press Herald/Maine Sunday Telegram, Kennebec Journal, Morning Sentinel and The Coastal Journal.
The transaction, which is scheduled to close Aug. 1, is an asset sale, meaning the buyer only purchases certain assets and liabilities from the seller. The sale does not include employee contracts, but it is anticipated that most employees will be rehired for their current jobs and pay rates.
All Sun Media Group papers are expected to continue publishing.
“I don’t believe in cut and slash,” Brower said. “I think that’s one of the reasons why the Costellos were looking at an organization like ours to lead (Sun Media Group) forward. … We’re not going to do anything to disrupt the autonomy.”
FOUR GENERATIONS OF OWNERSHIP
The sale will end more than a century of Costello ownership at the Lewiston newspaper.
The origins of Sun Media Group date to a weekly paper founded in 1847, according to the Sun Journal’s website. L.B. Costello began working there for an uncle and started running the business in 1898. He was succeeded by his son, Russell H. Costello, from 1930 to 1993. James Costello Sr. followed his father into the company, holding a variety of management positions during a tenure of more than 60 years that included expanding the business and buying weekly newspapers in Maine in 1987. Two years later, he merged the Lewiston Evening Journal and the Daily Sun to form the Sun Journal. When James Costello Sr. died in 2015, he was lauded as a champion of community journalism.
His children are the fourth generation of Costellos to run the business.
‘A BIT OF A BITTERSWEET DAY’
“It’s a bit of a bittersweet day,” said Steve Costello, vice president of advertising and marketing at Sun Media Group. “We are pleased that the new ownership is going to be as it is and thinks similarly to us as it relates to values. But it’s a very emotional day as well.”
Costello said the company had not been actively seeking a buyer and had not received offers from other entities.
Both buyer and seller said the sale grew out of their working relationship. MaineToday Media already handles digital ad services for Sun Media Group, for example, and the Lewiston pressroom printed the Press Herald, Kennebec Journal and Morning Sentinel several times this year during MaineToday Media’s transition to a new press.
“I’ve known the Costellos for 20 years,” Brower said. “I’ve always respected what they do and the place they fill in their community. The timing was right for the Costello family to look for the next custodian for their papers.”
The company is profitable, Costello said, and the decision to sell was not prompted by financial trouble. He described the deal as “the next logical step” for Sun Media Group.
“The media landscape has changed dramatically in the past 10 years,” Costello said. “We have scaled this organization up as much as we can. It really is about scale going forward. You need to have a larger organization that is broader in its depth and broader in its abilities to financially support some of the digital initiatives.”
COSTELLOS’ COMPANY TIES ENDING
Both parties declined to disclose the purchase price, and Brower would not say whether Sun Media Group was bought with cash or a loan funds. The Costello family will not retain any financial interest in the company and will gradually transition out of its management.
“One of the reasons for us doing this is we feel that Reade and the new ownership have the same viewpoint toward the employees (as we do),” Costello said. “They are the lifeblood of the company.”
Brower expects to save on some expenses; for example, a larger company might be able to purchase newsprint at a lower rate. He said it is too early to determine where the redundancies between the two companies are or whether changes will be necessary.
But he pointed to his purchase of MaineToday Media in 2015, when the company retained 98 percent of its employees during the sale.
“Life is not going to change dramatically,” Brower said. “The idea is we’re buying something we believe is already a topnotch organization. It doesn’t need fixing. It’s time for a new steward – that’s all there is to it.”
Lisa DeSisto, MaineToday Media’s president and CEO, will expand her role to become the CEO of Sun Media Group as well. She expects a smooth transition between owners. MaineToday Media and Sun Media Group have been collaborating for years, DeSisto said, in printing, distribution and digital services.
“This acquisition gives Sun Media Group and MaineToday Media even more opportunities to collaborate, while maintaining the distinct and trusted brands of each company,” DeSisto said in a prepared statement. “We are excited to work with the Sun Media Group team to see all we can accomplish together.”
LOCAL OWNERSHIP CONTINUES
In addition to its print publications, MaineToday Media also publishes PressHerald.com, CentralMaine.com and MaineToday.com. With nearly 400 employees, it is the state’s largest newsgathering organization.
In June, the print publications had a combined circulation of more than 60,000 people daily and 79,000 on Sundays. The Press Herald has the broadest reach in the group with a daily circulation of 40,000 and a Sunday circulation of 57,000. The company attracts 9 million page views a month across the three websites.
The Sun Journal has daily circulation of roughly 18,600.
Last year, Brower and investor Chip Harris bought two family-owned newspapers in Vermont – the Rutland Herald and the Barre-Montpelier Times Argus.
Brower also publishes the Free Press in Rockland, the Courier-Gazette in Rockland, the Camden Herald and the Republican Journal in Belfast.
Sun Media Group will operate separately from Brower’s other publications, but will be controlled by his parent company, RFB Holdings, which also owns MaineToday Media, Alliance Press in Brunswick and Courier Publications in Rockland.
Costello said Sun Media Group will continue printing the Bangor Daily News on its Lewiston press. Brower does not yet know how the sale will affect agreements under which the Sun Journal and the Forecaster group share content on occasion with the Bangor Daily News.
COMBINED SIZE ADDS STRENGTH
When the sale is completed, Brower will own newspapers in Maine’s two largest metropolitan areas as well as its capital. As a whole, the publications will reach hundreds of thousands of people in southern, midcoast and western Maine.
“It means a lot that it’s staying under local control,” Brower said. “I think that was important to the Costellos. I’ve been in Maine for almost 40 years. I care about the communities that we serve, and I care about the state as a whole, and I care about the industry. That dovetails exactly with what the Costellos stand for.”
Costello said the scale of Brower’s companies will help Maine’s community newspapers to survive in an increasingly digital world.
“In order to meet the changing demands in the digital world we live in, you need scale to do that,” Costello said. “Community journalism is the backbone of what our democracy was built on. … It will enable the local press to continue.”
Sun Media Group employees heard the news Monday afternoon. Those who were not at the Lewiston building for the announcement listened via conference call.
Judy Meyer, executive editor at the Sun Journal, said it was an emotional experience for members of the Costello family and for their employees. Meyer has known the Costellos for 25 years.
“I’m going to miss having them as working partners,” she said. “But I’m thrilled they have entrusted the company to Reade, who I think very much shares their values and cares about community journalism. I think that is a good thing for our readers.”
COMPETITIVE SPIRIT REMAINS
Editors at the Sun Journal and the Forecaster group said their employees seem reassured that layoffs are not expected as part of the sale. Mo Mehlsak, executive editor at the Forecaster, particularly hopes that young reporters are not scared off by the news.
“I’ve told the couple I’ve had the opportunity to talk with, as far as I know, they are still employed, I am still employed, and we still have newspapers to put out,” he said.
Meyer and Mehlsak both do not expect a common owner to dull the sense of competition among the papers.
“As I’ve always told people when we hire them, we don’t pay much, and we ask people to do a lot, and what the job lacks in financial rewards it makes up in the rewards you get when you beat the big guy on the story,” Mehlsak said. “That’s what we thrive on, the competitive nature of this profession. I hope that’s not going away.”
Megan Doyle can be contacted at 791-6327 or at:
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