Morris sells its small papers

Posted: Thursday, October 25, 2007

AUGUSTA, Ga. Morris Publishing Group agreed Tuesday to sell 17 newspapers to GateHouse Media Inc. for $115 million.

Morris, owner of the Peninsula Clarion, will use the cash to pay down debt. The sale will leave the Augusta-based company with 10 medium-sized papers.

Morris Publishing Group is a wholly owned subsidiary of Morris Communications Co. LLC, a privately held media company that also owns billboards, radio stations, magazines and book publishers.

GateHouse, headquartered in Fairport, N.Y., has 86 daily publications in 19 states.

"While it is difficult to say goodbye, this sale is in line with our strategic plan to focus on our larger markets and will enable us to pay down our existing bank debt," said William S. Morris IV, Morris Publishing Group's chief executive officer and president.

In an e-mail to employees, he was upbeat.

"Please allow me this opportunity to tell all of you that Morris Communications believes in the future of newspapers," he wrote.

While Morris is concentrating on its larger markets like Jacksonville, Fla., and Amarillo, Texas, GateHouse CEO Mike Reed is happy to focus on the smaller ones and predicted it would generate $14 million.

"This is an excellent acquisition opportunity for GateHouse," he said. "These are strong local media franchises in small markets, many of which are near existing GateHouse properties and offer compelling synergy opportunities."

In recent years, the increased number of media outlets and Web sites has challenged broadcasters and publishers dependent on advertising. Newspapers across the country have cut expenses and laid off workers in an attempt to cope.

The current downturn in real estate advertising since the sub-prime mortgage crisis triggered a new round of cost cutting at many papers.

Even as newspapers struggle for advertisers, they're reaching larger audiences both online and through single-copy sales. And publishers are experimenting with new approaches to make their content interesting and relevant, Morris said.

"Newspapers are changing because people want information in different forms," he wrote in his employee e-mail.

The daily newspapers to be sold are the Dodge City (Kan.) Daily Globe, The Newton (Kan.) Kansan, The (Pittsburg, Kan.) Morning Sun, the Hillsdale (Mich.) Daily News, The Holland (Mich.) Sentinel, the Hannibal (Mo.) Courier-Post, The (Independence, Mo.) Examiner, The Grand Island (Neb.) Independent, the York (Neb.) News-Times, The Daily Ardmoreite (Okla.), The Shawnee (Okla.) News-Star, the Yankton (S.D.) Daily Press & Dakotan, The Oak Ridger (Tenn.), and the News Chief (Winter Haven, Fla.).

The nondaily newspapers include La Estrella (Dodge City, Kan.) The Girard (Kan.) City Press and the Vermillion (S.D.) Plain Talk. Also sold was a commercial printing operation, Flashes Publishing (Mich.), which also publishes The Holland Sentinel and the Flashes Shopping Guides.

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