Dec.

04, 2013

Belo to explore sale of The Providence Journal

By Paul Edward Parker Journal Staff Writer pparker@providencejournal.com
PROVIDENCE The Texas corporation that owns The Providence Journal has hired a consultant to explore a potential sale of the 184-year-old daily newspaper, the company announced Wednesday morning. A.H. Belo Corporation, the Dallas-based company that owns The Journal, The Dallas Morning News and several smaller publications, announced that it had hired Stephens Inc., a privately held financial services firm based in Little Rock, Ark., to look into selling the Providence paper, the oldest continuously published daily in the country. This announcement opens a new chapter in the history of our news organization, said Howard G. Sutton, president, publisher and chief executive officer of The Providence Journal Company. Ownership of our news organization may change, but the mission of The Providence Journal remains unwavering: to operate an independent and profitable news organization of unquestioned integrity devoted to the dissemination of excellent journalism in Rhode Island while ever maintaining an outspoken voice for the welfare of the people who live and work here. Belo officials said the company would sell the Providence newspaper to concentrate on its businesses in Texas. The Providence Journal is an important financial contributor to our company, and the newspapers commitment to the citizens of Providence and Rhode Island is unmatched, said Jim Moroney, chairman, president and chief executive officer of Belo. However, with A.H. Belos focus on investing and growing in Dallas, it makes sense to explore this opportunity. Company officials cautioned that it wouldnt sell The Journal if it could not find an appropriate buyer or could not come to acceptable terms with a would-be buyer. Sutton told the newspapers staff that the paper is for sale at a 9 a.m. meeting in the auditorium of the companys office on Fountain Street. Sutton said that Stephens will conduct an in-depth study of The Journal, including interviewing people at the paper, going over financial statements and reviewing staffing levels, real estate holdings, equipment and operating systems. Results of the study will be compiled in a book that will be shared with potential buyers. After assembling the book, Stephens will solicit bids for the newspaper and then identify bidders for Belo to consider. Selling the newspaper is expected to take at least several months, Sutton said. It should happen sometime next year. The announcement comes at a time when the company is negotiating a new labor contract with its largest union, the Providence Newspaper Guild, which represents about 160 of the companys 385 workers, including reporters, photographers, copy editors and advertising sales representatives. Its not a total surprise, said union president John Hill, who noted that Belo this year sold The PressEnterprise, a daily newspaper it had owned in Riverside, Calif. That was pretty much the signal this day was coming.

Hill said that The Journal may benefit, if the new owners are not a corporation whose primary business interests lie in another state. I think theres an opportunity here to maybe bring in new ownership that will be more Rhode Island-centric, Hill said. He said the paper also could benefit if the new owners come from outside the newspaper industry, just as Red Sox principal owner John W. Henry bought The Boston Globe and Amazon.com founder Jeff Bezos bought The Washington Post. Maybe we get somebody in who looks at things a different way, Hill said. He added that the union would like to work with local buyers. If people are interested in talking to us, we are very interested in talking to them. The sale also comes at a time when the news organization is trying to sell its headquarters at 75 Fountain St. The only real estate to be included in the sale would be the companys printing plant at 210 Kinsley Ave., though the buyer could also purchase the Fountain Street building and its associated parking lots separately, Sutton said. He described the effort to sell the building as discussions with local investors and said that no sale is imminent. The Journal intends to lease a portion of the headquarters building to Roger Williams University, which is looking for expanded space in Providence for its law school and continuing education programs. The university would lease the first three floors of the building, while the news organization would consolidate its newsroom and offices on the top two floors, Sutton said. The universitys finance committee has recommended the lease to the schools Board of Trustees, which is scheduled to meet Friday. The Journal, like many newspapers in the last decade or more, has seen circulation drop and has bought out and laid off workers to try to cut expenses to keep pace with falling advertising revenues. In October, the company laid off 11 workers a few weeks after 16 employees accepted buy-out offers. On Wednesday, Sutton said the layoffs were part of cost cutting to meet financial objectives in the coming year. He said they were not designed to make the company leaner and more attractive to potential buyers. According to the latest figures, The Journals paid circulation is 105,800 on Sundays and 78,000 on weekdays, Sutton said. In a statement Wednesday morning, Belo said that the decision to seek a buyer is part of its revised financial and operating strategies that it discussed in its third-quarter earnings release. A sale of The Providence Journal would generate additional cash proceeds to potentially invest in or buy advertising and marketing services companies to grow and diversify revenues and to finance further share repurchase in the future, the statement said. Additionally, a sale of The Providence Journal would allow the company to continue to focus resources and management time and attention on its core Dallas market. Belo bought The Providence Journal Company in 1996, when both corporations owned newspaper and television operations. Later, Belo split into two companies, one called Belo Corporation, which operated the television stations, and the A.H. Belo Corporation, which operated the newspaper organizations. The Journal began publishing in 1820 as a semi-weekly called the Manufacturers and Farmers Journal and Providence and Pawtucket Advertiser. On July 21, 1829, it began publication as a daily newspaper.