31, including 4 top execs, let go
Blethen Maine Newspapers
finally sold to Pa. publisher
 The Seattle Times Co.’s sale of its Blethen Maine Newspapers to MaineToday Media Inc., led by Bangor, Maine, native Richard L. Connor, was completed June 15 for an undisclosed amount.
The newspapers have been on sale since March 2008, as circulation and advertising revenue declined and the Blethen family sought to conserve its resources for its newspaper holdings in Washington state, including the financially ailing Seattle Times.
After Connor announced his intention to buy the Maine group, it took months before financing was secured and the papers’ unions voted to accept concessions Connor said were essential for the sale.
The sale triggered layoffs the same day for 31 nonunion employees, who were told June 8 that they wouldn’t have jobs when the sale was completed. At least four of Blethen Maine’s top executives were let go the day of the sale.
Robert Bickler, publisher and chief executive officer of Blethen Maine’s flagship newspapers, the Portland Press Herald and Maine Sunday Telegram, said he was leaving the company. Also let go were Jeannine Guttman, editor and vice president of both newspapers; John Christie, publisher of the Kennebec Journal of Augusta and Morning Sentinel of Waterville; and Eric Conrad, executive editor of those two papers.
Connor will be editor and publisher of all three Blethen Maine dailies. Connor is editor and publisher of the Times Leader of Wilkes-Barre, Pa. He has worked in the newspaper business for almost 40 years as an owner, editor and publisher.
 The
other Blethen publication is the Coastal Journal of Bath. Also included
in the sale are the Web sites of each publication, including pressherald.mainetoday.com,
morningsentinel.mainetoday.com and kennebecjournal.mainetoday.com, and
niche publications.
Blethen Maine Newspapers employed about 500 people.
The sale price was not announced, but it was reportedly much less than the $230 million the Blethen family paid for the newspaper group 11 years ago.
Connor said there might be as many as 100 more layoffs.
“We’ve been very clear about this with the unions,” Connor said. “There will be a reduction in headcount at these newspapers in the next six months.”
The Blethen Maine
papers will be profitable by the end of the year, if not sooner, Connor
said.
 Three downtown Portland properties used by the Press
Herald and Maine Sunday Telegram have been sold: an office building, a former press
building, and a parking structure.
Some employees will
work from the papers’ South Portland printing plant, and others
will work in leased space in downtown Portland, Connor said.
The sale of Blethen Maine Newspapers was completed after the papers’ five unions agreed to concessions.
Concessions agreed
to by the Portland Newspaper Guild and the other four unions include
cutting pay by 10 percent, freezing wages for two years, and the company’s
suspending 401(k) and retirement contributions. In return, the employees
will receive a 15 percent stake in the company via a stock ownership
plan. Under the plan, the Guild will get two seats on the company’s
board of directors, which will have seven to nine total seats.
The Portland Newspaper
Guild, the largest union involved, with about 300 Press Herald employees
and 50 from the Morning Sentinel, voted May 29 by a margin of 153-19
to accept concessions, according to the Press Herald.
 “The
bottom line is this newspaper could’ve gone bankrupt,” Guild
President Tom Bell said, according to The Associated Press. “They
could’ve shut their doors and just sold the buildings, the assets.
But instead our workers have found a way to keep the company going and
to keep the newspapers in business.”
The Portland Typographical Union agreed May 29 to become “rolled into” the Guild contract, with nine of 13 members voting to accept the concessions, according to the Kennebec Journal.
On May 29, the Graphic Communications Conference of the International Brotherhood of Teamsters, representing 19 press workers at the Press Herald’s South Portland plant, approved the concessions by a 13-6 vote, according to the Press Herald. The Communications Workers of America, which has 85 members at the Kennebec Journal, also agreed May 31 to concessions, according to the Journal.
Another seat on the new company’s board of directors will be occupied on a rotating basis by a representative from the Teamsters and the Communications Workers of America, Connor said.
Connor has said concessions were a requirement for the sale of the newspapers, according to MaineBiz, and union voting sessions were scheduled after a May 22 announcement that Connor had secured the necessary financial backing to buy the papers. The Guild’s executive board unanimously voted to accept the concessions May 22.
Connor said job cuts are not restricted to nonunion employees.
Connor’s MaineToday Media is backed with private equity financing from Dallas-based HM Capital Partners and financing from the Portland branch of Citizens Bank. He had been trying to buy the Blethen papers since last summer and pushed to acquire them with new financing by the end of February.
“The design of this agreement is to change the way employees view the newspaper, to make employees feel like entrepreneurs,” Bell said, according to the Associated Press. “For this industry to survive, we need to have everyone thinking of new ideas and get their ideas to the decision-makers.”
With a company stake, employees will be able to have a hand in offering more worker benefits. Increases in the company’s value could also spark a return to retirement benefits, Bell told the Press Herald.
According to the Associated Press, Connor said: “There is usually an opportunity for an entrepreneur and an entrepreneurial team such as the one I plan to build here to make a difference in a business when they can make all the decisions on the spot, locally.”
Bell said the Guild contract retains provisions governing severance, seniority rights, health-insurance contributions, and the existing length of the employees’ workweek, according to the Press Herald.
The concession agreement allows for discussion in contract talks about whether retirement benefits and raises would resume, after one year under the current agreement.
POSTED 6/16/09
Blethen
Maine papers’ buyer selling Portland property
Days after the June 15 sale of Blethen Maine Newspapers to MaineToday
Media Inc., the new owner was in the
process of selling the Portland (Maine) Press Herald’s real estate
to a local developer who already has specific plans for the property.
MaineToday Media,
led by Richard Connor, bought the Blethen group for an undisclosed amount
and announced an intention to sell the property the same day. The sale
included the Press Herald and Maine Sunday Telegram; the Kennebec Journal
of Augusta; the Morning Sentinel of Waterville; the Coastal Journal
of Bath; affiliated Web sites and niche publications, all based in Maine.
After the sale of
the real estate, most Press Herald employees will move to the paper’s
South Portland printing plant, the Press Herald reported. The editorial
and advertising departments will work in leased offices in downtown
Portland.
Included in the
prospective property sale is the main office, at 390 Congress St.; what
was previously the press building, at 385 Congress St.; and part of
what is called the Chestnut Street garage, at 134 Lancaster St.
Sale figures were
not disclosed, but the main office has been assessed by the city at
$4.5 million, and the  press
building at $3.7 million, according to Mainebiz.
A purchase agreement
between developer John Cacoulidis and a MaineToday Media affiliate,
MTM Portland Properties, was reached June 17, giving both sides 30 days
to complete the sale, the Press Herald reported.
Cacoulidis has said
he wants to replace the 385 Congress St. building with a 30-story high-rise
that will have shops, a bank and a pharmacy on the first floor, nine
levels of parking, and hotel and office space.
Cacoulidis is known
for his 89-acre island home as well as his development efforts. In 2001,
he submitted a proposal for two 635-foot hotel towers, with a cable-car
system that spanned Portland Harbor, a couple of hospitals, and a convention
center on a 22-acre waterfront site.
His plans were rejected,
and his 30-story plan for the Press Herald building will have to overcome
an obstacle of its own because city regulations limit building heights
to 150 feet, or 15 stories, according to The Associated Press.
Connor, chief executive
of MaineToday Media, said the property sale was made to give the Blethen
papers a stronger financial foundation as the company looks to reduce
debt and reorganize after the purchase of the papers.
 The
Blethen papers had been on sale since March 2008. Connor had to secure
financing for the purchase, and he first asked the papers’ unions
to make concessions. From May 22 to May 31, the papers’ five unions
agreed to take 10 percent pay cuts, have wages frozen for two years,
and give up employer contributions to retirement money. In return, union
employees received a 15 percent stake in the company and seats on the
board, which Connor has said is part of the company’s goal toward
local employee entrepreneurship.
MaineToday Media
laid off 31 managers and nonunion employees the day of the sale, and
then announced its intention to sell the Press Herald buildings.
“These buildings
have been part of the fabric of the community and have been a home away
from home to employees who have spent their entire careers working here,”
Connor told the Press Herald. “But selling the physical property
is simply a financial necessity if we’re going to make the Press
Herald the newspaper that we, our readers and our advertisers want it
to be.”
There has been speculation
that the properties’ value was the major motivation for purchase
of Blethen Maine Newspapers in a dreary time for newspapers.
Peter Brodsky, a
partner for MaineToday Media’s financing partner, HM Capital of
Dallas, denied that.
“The business
was not purchased for the real estate,” he told The Wall Street
Journal. “We bought it for the newspapers, we intend to operate
the newspapers, and the investment thesis is that the upside will come
from the newspaper assets. However, the real estate aspect of the transaction
helped us get comfortable with the downside. If all doesn’t go
well, we felt there was some value to the real estate – it helped
us secure financing, as banks certainly were interested in learning
what (the) downside was.”
Reports that three
buyers were interested in acquiring the real estate surfaced the day
of the sale.
“It’s
absolutely our intention to monetize some of that real estate in the
very near term – some of that can be sold, and the proceeds can
be used to repay debt,” Brodsky told the Journal. “Nobody
knows how long the recession is going to last, so the fact that there
were some hard assets in the company did help us get comfortable.”
Report:
Blethen papers sold for $30 million to $40 million
Those involved with
the sale of Blethen Maine Newspapers to MaineToday Media have not disclosed
financial details of the sale, but Seattle-based Crosscut Public Media
has reported that the Seattle Times Co. took as much as a $200 million
hit in unloading the Blethen Maine papers.
Crosscut, which
reported that it spoke with people involved with the sale, said the
Blethen papers and the property involved sold for $30 million to $40
million, which Crosscut said was just a little more than the value of
the real estate.
Crosscut also reported
that a costly pension plan for Blethen Maine employees will have to
be paid for by the Seattle Times Co. rather than the new owner, MaineToday
Media.
The Seattle Times
Co. borrowed $233 million in November 1998 to buy the Blethen Maine
papers, according to Crosscut. The papers were put on sale in March
2008, and after dealing with hurdles such as securing financing and
asking union employees at the papers to agree to concessions, Connor
and the MaineToday Media investment group he leads bought the chain
June 15.
The Seattle Times
Co. did not want sale details to be made public and even kept MaineToday
Media from telling the largest union at the papers, the Portland Newspaper
Guild, what the sale price was, Crosscut reported.
As part of the deal,
the Seattle Times Co. had to agree to keep financing the struggling
Blethen pension trust, which could cost millions of dollars, although
exact figures are not known, according to Crosscut.
The Blethen Maine
Newspapers included the Portland Press Herald and Maine Sunday Telegram,
the Kennebec Journal of Augusta, the Morning Sentinel of Waterville,
the Coastal Journal of Bath, and sister Web sites and niche publications.
POSTED 7/2/09
New owner
giving away some copies of three Maine dailies
MaineToday Media
Inc., new owner of five newspapers formerly in Blethen Maine Newspapers,
has set up more than 100 newspaper boxes to give out free copies of
the group’s three Maine dailies, the Portland Press Herald, the
Kennebec Journal of Augusta, and the Morning Sentinel of Waterville.
The aim of the giveaway
is to increase the papers’ exposure, the Morning Sentinel reported.
Richard Connor,
MaineToday Media’s top executive, said he wasn’t sure how
long the giveaway would last or how much it would cost. The 100 boxes
will be moved to different locations, often near where other free local
papers are given away, he told the Sentinel.
The Connor-led MaineToday
Media bought Blethen Maine Newspapers, which also includes the Maine
Sunday Telegram of Portland, the Coastal Journal of Bath, Maine, and
affiliated Web sites and niche publications, June 15 from the Seattle
Times Co. for an undisclosed amount.
POSTED 7/2/09
These reports
were compiled, in part from published reports, by Jen Slothower, a graduate
student at the Northeastern University School of Journalism and a news
staff coordinator for the Bulletin. |
