Four Cape weeklies and Pennysavers sold to Illinois publisher
by Cape Business staffMay 8, 2006 -- Four Cape Cod weeklies and the Pennysaver shoppers have been sold by Herald Media Inc., parent company of the Boston Herald, to Liberty Group Publishing for a reported $225 million.
The papers – The Cape Codder, The Register, The Harwich Oracle and The Upper Cape Codder – are part of the Community Newspaper Co. chain of about 100 weeklies and four dailies across the state. They previously were owned by Fidelity Investments, and were purchased five years ago by the Boston Herald.
Liberty didn’t stop there. According to press reports, the Northbrook, Illinois-based company also is acquiring Enterprise NewsMedia LLC for about $175 million. Enterprise publishes the Patriot Ledger of Quincy, the Enterprise of Brockton and a number of South Shore weeklies, including those in Wareham and Plymouth.
Liberty publishes more than 270 small dailies, weeklies, and shoppers in 16 states, but none in New England.
Cape Cod businesses may never had heard of Fortress Investment Group LLC, but if they choose to purchase advertising in four weekly newspapers and the Pennysavers, they will be financing a global investment and asset management firm founded in 1998 with approximately $20 billion in equity capital currently under management.
Fortress, with headquarters in New York City, is behind the acquisition of the Cape Codder, The Register, Harwich Oracle and Upper Cape Codder by the Northbrook, Illinois, company that itself is undergoing a name change from Liberty Publishing Group to Gatehouse.
Gatehouse virtually overnight has become one of the largest community newspaper companies in the nation, publishing 77 daily newspapers, 271 non-dailies and 136 shoppers in 17 states. Its empire will jump by more than 100 publications with the $225 million purchase of Community Newspaper Company from the publisher of the Boston Herald. In addition, it is acquiring for $175 million an adjacent stable of dailies and weeklies owned by Enterprise NewsMedia.
“We are delighted to be expanding into these communities surrounding Boston," said Michael Reed, CEO of Gatehouse. “They are vibrant, growing communities with high newspaper readership and the type of demographics that are attractive to local advertisers. Both CP Media (Boston Herald) and Enterprise NewsMedia have a strong tradition of high quality journalism focused on their local communities and we look forward to building on their reputation for excellence. We are also excited to welcome the management and employees of these two fine companies to our team. Together, we will work to continue to grow and prosper as a company by providing outstanding service to our customers, while maintaining a quality and productive work environment for the benefit of all our employees.”
That should mean that Kirk Davis, once CEO of Community Newspaper Company when it was owned by Fidelity Investments, will again direct those newspapers and the others he put together for Enterprise NewsMedia, including the MPG group in Plymouth County, the Quincy Patriot and the Brockton Enterprise.
It also means that there are only four locally owned weeklies remaining on the Cape – The Provincetown Banner, Falmouth Enterprise, Chatham-based Cape Cod Chronicle and the Cape Cod Voice. The Chronicle is rumored for sale. The Barnstable Patriot recently was purchased by The Cape Cod Times, itself part of the Dow Jones’-owned Ottaway Newspaper group.
The clustering of daily and weekly publications in a single region is a fast-growing trend in an industry that is seeing daily newspaper circulation rapidly decline because of the Internet, free classified publications, the consolidation of department stores and changing demographics. Weeklies and niche publications, on the other hand, are growing. Gatehouse’s entry into the Cape and Southeast Massachusetts markets is a new challenge for the Cape Cod Times.
For local advertisers, the future brings a mixed bag. Greater consolidation has meant less local resources and greater centralization. Readers may find more big-store ads, since major retailers are encouraged to purchase multiple markets at better rates. On the other hand, local retailers may be able to reach larger audiences themselves – and depending on Gatehouse’s strategy, maybe even better ad rates themselves.
As to the fate of the Boston Herald, insiders report that owner Pat Purcell wanted to sell the daily as well, but there were no takers for the publication, which has been losing money and advertising for years.
Private Equity Week reported that Purcell had asked Wachovia Securities to sell the entire company, with potential bidders told not to bother if they only wanted the community papers. “But he had investors who wanted/needed out (Audax Group, Weston Presidio, Halyard Capital) and simply could not get enough buyer interest in a comprehensive deal.”
To learn more about Fortress Investment Group, please click to http://www.fortressinv.com.
To learn more about Liberty, visit www.cjr.org/tools/owners/liberty.asp and www.liberty-group.com/financial_info.html.
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