Prospective Buyers Conclude Meetings on Statesman Sale
February, 13 2009
Managers of the Austin American-Statesman wrapped up the last of four scheduled meetings with potential buyers and other parties Wednesday, setting up what could be the final stages in the newspaper's sale.
The four groups include people or companies with a variety of media and business backgrounds. They include two investment funds backed by billionaires, a New York private investment firm, a group headed by Austin residents, and some small and midsize newspaper chains.
Each group spent several hours in sessions with officials from the Statesman, its owner, Cox Media Group, or its advisers and, in some cases, officials from other properties that Cox is selling. Cox has put 29 newspapers up for sale in three states, including the Statesman, the Waco Tribune-Herald and several other newspapers in Texas.
This week's visitors included representatives from ZelnickMedia Corp. , a private equity firm based in New York, and executives from Granite Publications, a Taylor-based publisher of 22 community newspapers, including the Hill Country News and the Elgin Courier. Jim Friedlich , a partner at ZelnickMedia and a former executive at Dow Jones & Co., was seen at the Statesman offices, along with several Granite executives.
Last week brought a group that is working with Hicks Equity Partners, an investment firm founded by Dallas billionaire Tom Hicks. A source confirmed Hicks' involvement.
Executives from Las Vegas-based Stephens Media, the Stephens Inc. investment banking firm, and Jeremy Halbreich , former general manager of The Dallas Morning News, were seen heading into that presentation. On Wednesday, Halbreich was named chairman of the Sun-Times Media Group in Chicago.
The first presentation, held on Jan. 22, included Platinum Equity , a Beverly Hills, Calif., private equity firm founded by billionaire investor and movie producer Tom Gores , according to people with knowledge of the visit. In an e-mail, Mark Barnhill, a Platinum principal and former managing editor at the Los Angeles Daily News, said he could neither confirm nor deny the firm's interest in the Statesman or other Cox properties.
Former Statesman Editor Rich Oppel is part of a group that includes former Austin Mayor Roy Butler and Chris Harte, who is publisher and chairman of the Minneapolis Star Tribune.
Two other men accompanied Oppel, Butler and Harte at their Jan. 27 meeting with Statesman officials: Joe Natoli, chief financial officer at the University of Miami and a former executive at major newspapers in Philadelphia, San Jose and Miami; and John Schweitzer, an Austin businessman and board member at several companies and nonprofit organizations.
Various representatives of the groups did not return phone calls or e-mails. Those who were reached declined to comment, including Halbreich and Sherman Frederick, chief executive of Stephens Media.
Sandy Schwartz, president of Cox Media Group, and Statesman Publisher Michael Vivio also declined to comment. Both men said they expect to receive bids in the next two to three weeks.
After that, Schwartz said, "there's no way of telling" how the sale will progress.
The process of a sale "never goes the way you think it's going to go," he said. "It always changes."
Vivio said any final deal would have to strike a balance between what a buyer is willing to pay in a tough newspaper environment and what Cox is willing to accept.
The Statesman presents an interesting test case for the newspaper industry, said Rick Edmonds, a media business analyst at the Poynter Institute.
"If you can't find a buyer for a paper like that in a healthy growing market like Austin, I don't know where you can find buyers at all," he said.
The recession and migration of advertising from print to online media have pummeled newspapers and have brought the sales of many publications to a near-standstill. In that environment, Edmonds said, "it's possible that we'll see more of those kinds of arrangements - wealthy individuals or groups of interested citizens."
His description fit most of the groups that have visited the Statesman. Platinum Equity closed a $2.8 billion fund in September. Platinum has met with managers at the San Diego Union-Tribune, which also is for sale, according to reports in that newspaper.
Stephens Inc. is one of the largest investment banks not based on Wall Street. It is based in Little Rock, Ark., and has a sizable presence in Dallas. Two representatives from the firm's investment banking team were seen entering the meeting room the same morning as Halbreich and Frederick.