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1-Year-Old Child of Bankrupt Company Buys News-Journal and Halifax Media for $280 Million

| November 21, 2014

The house that Tippen Davidson built is changing hands yet again, less than five years after it was bought by Halifax Media.

The house that Tippen Davidson built is changing hands yet again, less than five years after it was bought by Halifax Media.

Four and a half years after it was acquired by the investors-owned Halifax Media Group as the flagship of a burgeoning newspaper conglomerate, the Daytona Beach News Journal and Halifax’s three dozen newspapers were sold today for $280 million in cash to New York-based New Media Investment Group, a publicly traded company that owns 402 small to mid-size community publications.

Just 78 of those publications are dailies, with a combined circulation of around 550,000. The rest are 235 weeklies (some published two or three times a week) and 89 shoppers, according to Reuters, though New Media combines the circulation of its free shoppers with that of its paid dailies and weeklies when it cites its combined reach. It also owns yellow page directories.

New Media is the stepchild of GateHouse Media, which had gone into bankruptcy, with over $1 billion in debt, before it re-emerged as New Media exactly a year ago.

“GateHouse has a well-earned reputation for cutting staff and compensation, although that hardly makes it unique,” Media Nation’s Dan Kennedy wrote today. “The larger story is that its executives clearly believe it can be the last local-newspaper chain standing by centralizing every part of its operations that aren’t strictly tied to local news.”

The company’s announcement of its acquisition of Halifax Media was limited to the general statements of its president, Michael Reed, and Halifax CEO Michael Redding. What the acquisition means for the News-Journal isn’t yet clear, though New Media’s brief history and focus point to a more pronounced development of digital media, a greater focus on increasingly local rather than regional news–and a quick draw on the firing line: when GateHouse Media acquired 33 newspapers in Massachusetts a year ago, dozens of jobs were cut within weeks of the acquisition.

One worrisome sign for newspaper staffers now owned by the new chain: Gatehouse-New Media believe in consolidated copy editing desks, which means that numerous newspapers’ copy editing duties are essentially offloaded to a desk elsewhere–a form of internal outsourcing–that leads to deep job cuts.

“At a time when few business executives want to mess with the newspaper business,” Kennedy writes, “GateHouse has gone all in. How it will end is anyone’s guess. But GateHouse has been down this road before, and it ended in bankruptcy. If Kirk Davis and company have a better idea this time, we should soon find out.”

New Media, which expects the deal to close at the beginning of 2015, is especially focused on its properties as investments and as bases for further acquisitions rather than as news services nurtured for journalism’s sake. “Once closed,” Reed (who in 2012 reported a salary of $1.3 million) said in a statement, “we will have deployed approximately $430 million in local media assets in a little over one year. As we look toward 2015, we are excited to integrate Halifax’s publications into New Media’s business, and continue to successfully execute on our strong pipeline of other potential deals.” New Media currently owns papers in 27 states.

New Media’s core group of executives is essentially unchanged from the GateHouse Media core, with Reed as CEO and Kirk Davis as chief operating officer.

In March 2010, Halifax Media bought the Daytona Beach News-Journal for $20 million. Less than two years later, Halifax bought the entirety of the New York Times regional group, some 16 newspapers (or 11 percent of the New York Times Company’s overall revenue), for $143 million in cash. Six months later, Halifax bought Freedom Communications’ 19 newspapers in North Carolina and Florida for an undisclosed sum. Last year Halifax bought three more papers in Florida, a group that belonged to HarborPoint Media, and this year the company bought one paper in Massachusetts.

On Thursday, New Media Investment Group traded at $18.75 a share.

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12 Responses for “1-Year-Old Child of Bankrupt Company Buys News-Journal and Halifax Media for $280 Million”

  1. Pogo says:

    Party like it’s 1928…

  2. Jim R. says:

    Maybe it’s time for Flagler live to become Volusia live

  3. Rick Gardner says:

    If it weren’t for Mark Lane, Ken Willis and baseball box scores I could care less about the NJ

  4. Seminole Pride says:

    Newapapers is a dying breed.

  5. Tom Reynolds says:

    Great story, with lots of good info.

  6. Retired FF says:

    I wonder if they will now actually start reporting/printing some real news instead of the junk they have been. It is rare to see any type of world or national news and the local coverage has become a joke also. Their web site that they want to charge $$ for ever month is horrible also.

  7. Yipee says:

    Glad to see some new ownership come forward. The service and quality of the Daytona Beach News Journal has been lacking. Hopefully we can get some real reporting, and get some accurate coverage. The paper prices has risen, and the quality has declined. So much for the page notice from Rice that they were going to be for the readers and report accurately….never happened. I know so many people who have discontinued their delivery, and it is just wrong that restrictions are placed on reading the paper on line. That is certainly not a way to get someone to subscribe, it is just a way of pissing people off.

  8. Victor Mature, III says:

    I’d hate to see the News-Journal go. The newsprint used is excellent for cleaning my car windows to a streak-free shine with vinegar, ammonia and distilled water. It also excels as a great vehicle in which to wrap freshly caught catfish. Lastly – I never walk Rover sans a few pages in my pocket.
    But seriously – they dumbed that newspaper down to the point that the so-called “dumb” now feel condescended to and offended.
    My favorite article ever was the one about Volusia County’s ex-D.A. John Tanner and his excellent encounter with Jesus, which in turn hysterically blinded him, and made him into a Christian. (I’m not kidding.) This time period in Mr. Tanner’s life coincided with the Ted Bundy execution. Shades of Saul of Tarsus on the Damascene Road? I think not.

    I feel like washing my windows, then walking my canine confidant.

  9. Tom Brown says:

    There is nothing encouraging in the recent experiences of other newspapers acquired by GateHouse. For example, the Providence Journal, purchased last summer, is going through the gutting process right now. If the N-J can somehow hang on for another 3-5 years, perhaps it can be sold to Warren Buffet, who does appreciate the value of journalism above and beyond its cash-cow function. As an ex-employee (1990-2008) I hope the corpse can be brought back to life.

  10. gmath55 says:

    Maybe they will start paying the carriers a living wage? $0.11 per paper for daily and $0.19 per paper for Sunday delivery isn’t going to cut it when the paper sales for $0.75 and $1.50 for Sunday. It get better though. They pay the carrier .07 per paper for the USA Today and New York Times. USA Today sells for $2.00 and the NY Times sells for $2.50 for the daily and $6.00 for the Sunday. Carrier pays for their gas and wear and tear on their vehicle. Somebody putting money in their pockets and it’s NOT the carrier!

  11. Dan Walker says:

    Newspapers used to be mostly owned by local families like the Davidsons, but now they are wall street investments, just like hospitals, insurance companies, apartment complexes, etc. Food Lion was a
    good company until they were sold to foreign investors. Then it became all about profit to the stock
    holders and 100’s of stores were closed. With our fast moving Global economy you will be seeing
    this more and more. In the future food will become the ultimate economic weapon. Whoever
    controls food production and distribution will rule.

  12. Joe smith says:

    This is horrible, gatehouse does nothing but gut papers and leave nothing but canned AP news. They ruin the integrity of what newspapers were.

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