New Media buys ProJo for $46M, Belo retains headquarters
A.H. BELO has sold The Providence Journal to New Media Investment Group, the parent of GateHouse Media, for $46 million in cash. The deal includes the newspaper's Providence production facility but does not include the headquarters building, pictured above, which Belo will continue to market.
PROVIDENCE – The A.H. Belo Corp. has agreed to sell the Providence Journal and its production facility for $46 million in cash to New Media Investment Group Inc., the parent company of GateHouse Media, the publisher of The Standard Times of New Bedford, The Herald News of Fall River, the Taunton Daily Gazette and the Cape Cod Times, among 78 daily newspapers, 235 weekly newspapers and 344 websites. In total after the close of the deal, New Media will operate in 363 markets in 27 states.
The purchase does not include the Journal’s Fountain Street headquarters, the downtown parking lots and the former Rhode Island Monthly/Sunday inserting building, according to a news release from Belo, which the Dallas-based publisher is expected to lease to New Media for a year, and which Belo will continue to market for sale.
Belo Chairman, President and CEO James M. Moroney III thanked “our colleagues in Providence for their hard work and support as we have been privileged to own and operate The Providence Journal for the past 17 years.” The Journal was first published in 1829, making it one of the oldest print publications in the United States. According to the most recent audit, the Journal has weekday circulation of approximately 72,000 and Sunday circulation of roughly 96,000.
Michael E. Reed, New Media’s president and CEO, said in a release that “The Providence Journal is … the preeminent provider of local content to the greater Providence marketplace. … Its high quality editorial standards have resulted in four Pulitzer Prizes. … We deeply admire the great work that has been done in Providence under the stewardship of A.J. Belo and look forward to continuing that tradition.”
Reed said that within the last year the company has agreed to purchase “$151 million of local media assets [and] look forward to the second half of the year … focused on executing on our strategy which we believe will drive substantial shareholder returns.”
In discussing the purchase, Reed noted that the region’s nearly 30,000 small and medium-sized businesses provided a revenue opportunity. “With only about 25 percent of revenue coming from local print advertising, we believe this acquisition further evolves New Media’s revenue mix towards stable to growing revenue categories.”
The first-quarter report for Belo registered a 4.4 percent decline in advertising and marketing services revenue to $9.1 million, made up of 0.8 percent, 5.4 percent and 8.7 percent declines in display, classified and preprint revenue, respectively. Only digital advertising and marketing services revenue increased in the first three months of the year, by 0.9 percent to $1.3 million.
Circulation revenue at the Journal increased 4.7 percent in the period to $8.3 million, while printing and distribution revenue showed a 19.4 percent gain to $3.7 million.
The total revenue mix for the Journal increased 2.7 percent to $21.2 million for the quarter.
Belo has agreed to retain sponsorship of the defined benefit pension plan for Journal employees, according to a company release.
The deal is expected to close in the third quarter of 2014.
In 2013, Boston Red Sox owner John W. Henry purchased the Boston Globe and the Worcester Telegram & Gazette for $70 million. Henry sold the Telegram & Gazette in June to the Halifax Media Group for an undisclosed amount.