Here's the link to the Press Herald's story on the sale:

http://pressherald.mainetoday.com/story.php?id=221740&ac=PHnws

This article doesn't tell us much, except that the new owners don't have all their financing lined up as yet -- which could be a major problem -- and that, according to a union official, "significant layoffs" are likely once the sale is completed.

Al Diamon

Interesting footnote: As of 5:40 this morning, it appears as if nobody told the Kennebec Journal and Morning Sentinel about the sale. There's nothing on their Web sites.

Al Diamon

The story is in the print editions of the KJ and Sentinel. Why it isn't online remains a mystery.

Al Diamon

This story doesn't move the ball forward, IMHO. What it looks like to me is that Blethen is facing a severe cash problem and needs a piece of paper to show the banks he's making progress on getting rid of debt-encumbered properties like the Maine group. Blethen's hope is the banks will accept this and not take him into foreclosure on his entire empire. In this climate, it might buy him a couple of months, but won't work in the longer term. It is looking like this Christmas season is going to be a world class advertising disaster for newspapers. Contracts for Christmas ads are on the floor. The 1Q is normally the worst quarter for newspapers, so a disaster in this quarter followed by an even worse 1q next year translates into misery, penury and economic conditions equal to hiroshima.
Yes, as the printed story says, financing remains outstanding. Tell me, what bank is going to loan big bucks to a group of investors who have little money of their own, and an investment model involving a business which has no realistic future? You can write -30- to this deal.

A change in ownership of the Portland Press-Herald -- if it ever happens -- can 't come too soon to readers of the Blethen newspapers. What with cutbacks in staff and other operating expenses, the newspaper has limited value in terms of keeping readers informed. I don't think I've ever seen a shallower newspaper than the version that is being published today. With the dramatic drop in advertising, I don't see how the new owners will fund an improved product. In fact, the newspaper industry in general has to come up with a new business model. Unfortunately, that prospect is dim due to the fact that the industry made the fatal mistake a decade ago in putting up virtually all their content on the internet for free. What they should do is to immediately start charging for online access to their proprietary content. It will be a painful process, but a necessary one to reinvigorate the value of the news they generate. Alas, Blethen has emasculated their newspaper staff to such a degree that the editorial side of the operation will probably have to be rebuilt from scratch -- and it is doubtful that MMI has the resources to do that.

I agree with the above poster. The story is that there is no deal, financing has not been secured, and, in all likelihood, if MMI gets anything, it will be assets acquired in a bank-imposed fire sale.

Essentially, this asset purchase agreement is the equivalent of those greyhairs who show up your yard sale at 7 a.m. while you're still hauling boxes out of the garage.

Tying in to anonymous' second point, I agree that this winter is going to devastate Maine newspapers. Look for any/all of the following to happen by mid-Spring, 2009:

A number of weekly papers will fold and their parent companies try to preserve the bottom line at the daily paper at the core of the corporate structure.

The Morning Sentinel will fold and merge with the Kennebec Journal.

Some daily paper may fold its Sunday edition and re-brand the weeklies it owns as regional Sunday papers for the daily.

Look for more layoffs and more story sharing. Currently, you might find three reporters at one meeting, all working for different papers but all answering to the same corporate parent. Good for the reader, but bad for the balance sheet. Some publisher will decide to send just one daily reporter and then farm that story out for editing to his or her weekly partners.

Some papers will launch oddly discordant side-businesses, to create alternative revenue streams, a la the Sun Journal's consignment shop.

On a less discordant line, some paper will begin offering more than eyeballs for online advertising, adding web design and hosting departments to give small businesses more value for money, in the form of managed websites that sell and ship product for the advertiser.

Along that line, look for the savvy publisher to add "send a gift" options with its online birth/wedding/graduation announcements, tied to online registries the featured community members create with the paper's advertisers. Also, "send a memorial" for obituaries that are tied to local florists, or nonprofits, in the form of charitable in memoriam donations.

Stringers will become a larger part of every paper's new gathering blueprint, as publishers push "citizen journalism" as a euphemism for, "getting by with seniors and students for whom the fun of writing and being published outweighs little of no pay."

Some paper somewhere will finally realize that the web edition accomplishes nothing when it is only an electronic version of the dead-tree edition. Some publisher will hit on the concept, "web says what, print says why," and very content to match the delivery system, i.e. short, frequently updated stories on the web, longer pieces, with more color and analysis in print.

Some paper will expand its website so that it functions almost like a public access station, with raw footage of public meetings, clips of local sporting events and youtube style reader responses, all embedded with commercials for area businesses.

Look for the launch of several new web only newspapers covering specific regions, if not the entire state.

A second attempt save money by shifting public notices from print to the web will fail only after Maine's daily papers agree to create and share a responsibility for an online resource for such listings. Although the state will save money, this will preserve some revenue for the papers involved, although not enough to prevent a heavy round of layoffs.

Some paper will form a partnership with an area technical school, supporting the publication of a school paper and farming out its staff as teachers of journalism, marketing/advertising, photography, printing and graphic design, in return for low-cost labor (fact checking, proof reading, cub reporting) from students. The legislature may even create a new "apprentice" job class that will allow employers to pay less than minimum wage and no benefits in return for some form of OJT certification.

Look for partnerships between papers and tv stations in which they will share reporters who are both photogenic and able to write. You might soon hear a WGME reporter close a segment by saying, "for more details and a (pick one: comprehensive interview with person A/ in-depth look behind the scenes of event B), read my story in tomorrow's Sun Journal.

Anonymous 2:45 p.m. sketches out a very good scenario. I agree with most of what is said. But I really don't see the emergence of Web-only local publications. There is not the financing available from internet ads to make them viable, and I notice blogs begin with great enthusiasm, then postings fall off after a few months when what was fun becomes routine.
What I see is some saavy local entrepreneur will move into the market and start up a local newspaper to replace the papers that are going to evaporate. There is sufficient local advertising to keep a local startup a chance of making it in five years.
As for journalism schools, I doubt many are going to be operating after the rolling bankruptcies of newspapers that is coming. Look at the number of teetering chains, from Sam Zell's Tribune to Billy Dean Singleton's Media News, both vulnerable to gigantic debt. Blethen collapsing will take out the Seattle Times and Maine papers as well. What foolish freshman will say he/she can make a career when there are so few big papers left.?
As for TV, I don't think they can continue to have a viable news operation without the newspapers to provide them the news. These are highly lucrative shows but really thinly-run operations and managers will decide that Leave it to Beaver re-runs provide almost as much ad revenue as news, so will drop local news.

These union leaders need to find out soonest what is the financing behind this group. I suspect what this group is trying to put together is something like Sam Zell put together to take over the Tribune. That involves getting hold of the pension plan and using that as leverage for a loan to buy the papers from Blethen. If you want to know the consequences of this, take a look at what is happening and has happened at the Tribune, which now is foundering under $12.5 billion in debt. It's a win-win for investors to use pension plans to create an ESOP to run the papers. Zell has very little at stake if the plan fails, because he has little of his own money involved. It is the pension plan that will carry the costs if the Tribune goes down, and that is something Maine newspaper unions have to consider as they weigh this plan.

Blethen talks a good game abt breaking things on the web, but the online staff was forbidden from posting the Cohen sale story on the paper's site when it broke b/c higherups thought they would be the first in the next monnig's print edition. Yeah, right. The online editor was pretty pissed off.

There's an online editor? Could've fooled me.