Al Diamon
It’s Not Dead. Really.
Cancel the funeral: Rumors of the deal’s death have been greatly exaggerated.
Maine Media Investment has ended its exclusive negotiating arrangement to buy the Blethen Maine Newspapers. That agreement gave the partnership headed by former U.S. Sen. William Cohen, Pennsylvania newspaper owner Richard Connor and developers Michael Liberty and Robert Baldacci sole rights to buy Blethen’s three Maine newspapers – the Portland Press Herald, the Kennebec Journal and the Morning Sentinel – and other media properties in the state for 60 to 90 days.
The deal was announced in late July, meaning it still had up to two months to run. But MMI requested the agreement be terminated, because the partners realized they could not collect all the information needed and negotiate a sale price in the timeframes required in the document, according to MMI spokesman Dennis Bailey.
Dropping the exclusivity arrangement “really doesn’t mean much,” Bailey said. “It doesn’t mean we’re any less interested.”
That assessment was confirmed by other sources, who said that when Connor met on Monday with members of the Portland Newspaper Guild, the largest union at Blethen, he still put the chances his group would buy the papers at 80 percent.
Bailey said the major sticking points are financial.
“We are going to have to borrow some money to do this,” Bailey said. “We want to get the right numbers. The situation has changed, even since we’ve entered the picture … We need to find a number that banks will say makes sense.”
According to a source familiar with the negotiations, a sale hinges on how much of Blethen’s debt the new owners are willing to take on. Blethen bought the papers a decade ago for a reported $230 million and, according to knowledgeable estimates, still owes more than $100 million on loans it took out to finance the purchase. It’s that obligation that’s put the papers in a precarious financial situation.
“The Press Herald is making money,” said the source. “They just have so much debt. If it wasn’t for the big nut they’ve got, they’d be doing fine.”
Another problem: While Blethen officials in Maine seem eager to get a deal done, even a deal that would cover less than half the remaining loans, the Blethen family in Seattle doesn’t appear to be in any hurry. As a person familiar with the thinking of company chairman Frank Blethen told me, “He still thinks somebody is going to come in and give him a good price. He’s going to be shocked.”
Blethen officials in Maine have told insiders they have at least one other party besides MMI interested in buying the company. Nevertheless, Bailey still sees the Cohen group as the frontrunners.
“I don’t think there’s any question the union wants to do a deal, Blethen wants to do a deal, and we certainly do,” he said. “It’s just taking longer.”
Expanding the news: WGME-TV in Portland is adding another half hour to its evening newscast. Starting Tuesday, Sept. 2, Channel 13 will premiere a program titled “News 13 at Seven: The Political Edge,” hosted by longtime anchor/reporter Gregg Lagerquist. The 30-minute program will air five nights a week from 7 to 7:30 p.m.
According to WGME news director Robb Atkinson, the show will consist of a first segment containing a roundup of the day’s news, a second segment featuring weather and then three more segments on local and national politics. The station is also planning to use the latter segments for debates among candidates for the U.S. Senate and House, as well as between opponents and proponents of the beverage-tax repeal on the November ballot.
The new show is scheduled to run at least through the presidential inauguration in January, but Atkinson expects it to continue after that, although its focus on politics will likely shift to other subjects.
“We’re dedicating ourselves to really digging into political issues,” he said. “After the election, it may become more of a traditional newscast.” Atkinson said the station isn’t adding any staff to help produce the extra half hour of news. All that digging will have to be done by the current crew.
Expanding the numbers: From Press Herald sports reporter Kevin Thomas’ blog, “Clearing the Bases,” Aug. 28:
“With the Yankees fading (though not out), the AL playoff picture is narrowing. The top four teams: Rays (80-51), Angels (80-52), Red Sox (77-55), White Sox (76-57) and Twins (75-58).”
Three words of advice, Kevin: Count twice.
Reducing the time: I’ve received several e-mails lately complaining that I don’t devote enough space in this blog to TV news. That’s probably true. So, last evening, I sat down to watch both Portland stations’ 5 p.m. newscasts.
WGME, Channel 13, led off with a tease in which anchor Kim Block identified Tom Allen as Maine’s “2nd District congressman.” Maine only has two districts. Allen represents the other one. Shouldn’t be that hard to keep them straight.
I hit the remote and switched to WCSH, Channel 6. In the first story I saw, anchor Pat Callaghan referred to the person killed by South Portland police officers in a Monday morning shooting incident as “Michael North.” His name was “Michael Norton.”
If I’m going to put up with people getting it wrong, I at least want it to be entertaining. I flipped the channel to ESPN and watched “Around the Horn.”
Al Diamon can be e-mailed at aldiamon@herniahill.net.
Posted on Thursday, August 28, 2008 in Permalink
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Reader Comments:
On Blethen Maine, boy, have you been sold a lot of codswallop. Frank Blethen is breathing fire to get out of his Maine obligations for the simple reason it threatens to bring down his entire empire, including Seattle. And insiders say the reason the Cohen group bid is falling apart is that no bank is willing to loan any more money involved in this climate.
Yes, the newspapers are still profitable, but not if you load them down with a huge debt load with interest payments involved. The only deal that makes sense for the Cohen group is about $20 or $25 million, which is reasonable given the revenues the Maine papers produce now. The banks holding the Blethen debt don't like that because Blethen's Seattle paper can't carry the remaining debt.
Given the stalemate, Blethen's empire is in real peril. Anyone know a paper that will hire Ryan Blethen as a columnist, because he is about to lose his inheritance.
I agree with the first comment. The headline is the deal fell apart.
"NBC Nightly News" ran a story on the Press Herald's problems tonight. Here's the link: http://www.msnbc.msn.com/id/3032619/#26442966
Another clear example of a western rube being taken to the cleaners by slick easterners? Blethen really paid a pretty penny for these properties, which he found are really in dire need of modernization with new presses, etc. Guy Gannett must be really enjoying his tropical megatinis at his beachfront resort, where he is spending the profits from this deal. What a rube this Blethen joke is.
"Blethen really paid a pretty penny for these properties, which he found are really in dire need of modernization with new presses, etc." Didn't they just buy all new presses when they moved printing to SoPo and had the colorized reformat in the Lou Ureneck era (when they got the red stripe and the faux-Colonial headline font)? IIRC, that was still under Guy Gannett Communications.
Oh, and Guy Gannett has been dead since 1954. Maddy Corson and his other descendants may be living the good life, but when you think of it, how many family businesses survive intact into the 4th generation?
Anyone who remembers Ureneck is really dated himself/herself, because Portland runs a flexographic press installed in 1990 that is now badly outdated by technology. The 20-year-old presses have limited use for the sort of graphics today's advertisers need, and Portland still wants a premium for color that other newspapers have already done away with.
By my estimate, it will require about a $50 million investment to bring Portland up to date and modernize. That is only one of the modernization efforts needed, since Blethen has beggared many other needs.
Thanks for the 4th generation quip, but others may not know that Ryan Blethen is the 4th generation of Blethens.
Didn't expect to find a discussion about Flexo presses here. The problem is that Portland's Flexo is only one of about two dozen Flexo presses left. Portland is spending about $1 million a year on Flexo plates because the polymer plates cost four times those of other offset press. Like any other press, there is also a problem with ink buildup on the rollers that comes with age. Most papers have already junked their Flexos in favor of modern presses that require less manpower and are more flexibile than Flexo.
Modesto Bee and Boston Herald junked their Flexos this year because parts have become prohibitively expensive.
What's a "press?"
A press is what prints the paper. They are very expensive machines.