New York Times to Sell Regional Papers

By musiclover - Mon Dec 19, 4:34 pm

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New York Times Co. said it is in advanced discussions to sell 16 local newspapers that make up the company’s Regional Media Group to Halifax Media Holdings LLC.

The Times’s Regional Media Group comprises papers in various states including Florida, California and North Carolina and has a combined weekday circulation of over 400,000. The group’s revenue in 2010 was $277 million.

Craig Huber, a senior analyst at independent stock-research company Access 342, estimates the group could fetch up to $360 million, based on his estimate of the group’s earnings.

Local papers like the ones in the regional group have been hit particularly hard by the advertising downturn because the cornerstone of their business, classified advertising, has mostly moved online. Advertising revenue in the group declined 9.7% to $36.8 million in the most recent quarter while total revenue in the group was down 7% to about $60 million.

In the second quarter, Times Co. recorded a $161.3 million non-cash charge primarily related to a write-down of assets in the group.

News of the sale comes after last week’s announcement that Times Co. chief executive Janet Robinson will resign her post at the end of the year.

The regional group is overseen by Michael Golden, vice chairman of the company and a member of the Sulzberger family, which controls Times Co. through its ownership of most of the super-voting shares. The group accounted for about 11% of total company revenue in the third quarter.

Over the last few years, Times Co. has sold assets and made other aggressive moves to relieve mounting financial pressure as revenue declines throughout the company threatened its ability to pay down debt. The company sold all or parts of various assets including its headquarters building and its stake in the holding company of the Boston Red Sox. It also borrowed $250 million from Mexican billionaire Carlos Slim, whom the company repaid in full this past summer, three years before the loan was due. Times Co. said total debt was $772 million at the third quarter and that it had cash and short-term investments totaling $263 million.

Of the latest sale, Mr. Huber said, “They’re doing it because they’re just trying to sell off assets to become even more solvent. All the company cares about at the end of the day is keeping afloat the flagship New York Times newspaper for the long-term. Everything else in my opinion could be and would be put up for sale.”