News Corp., the publisher of the Wall Street Journal, sold local newspapers such as Oregon’s Ashland Daily Tidings and Massachusetts’ Cape Cod Times to an affiliate of Fortress Investment Group LLC for $87 million.
The Dow Jones Local Media Group operates 33 publications, including eight daily newspapers and 15 weeklies, News Corp. said yesterday. Newcastle Investment Corp., a real estate investment trust managed by Fortress, acquired the publications, it said in a separate statement today.
News Corp., led by Chairman Rupert Murdoch, is narrowing its focus to larger publications such as the Journal, the New York Post and the U.K.’s Times. The company split off this year from the billionaire’s entertainment properties, starting out with $2.6 billion in cash and zero debt.
The sale reduces the Dow Jones unit to the Wall Street Journal, MarketWatch, Barron’s, SmartMoney.com and the conferences business and news site AllThingsD, whose contract with the company ends this year.
Shares of News Corp. rose 1.6 percent to $16.03 at the close in New York, where it has its headquarters. New York-based Fortress gained 2.2 percent to $7.32.
The newspapers will be combined with GateHouse Media Inc., another unit of Fortress that currently operates 78 daily newspapers, to create a print and online company called New Media, Fortress Co-Chairman Wesley Edens said today on a conference call. GateHouse will file a prepackaged bankruptcy next week as part of the plan.
The community-paper division sold by News Corp. was formed after Ottaway Newspapers merged with Dow Jones in 1970. The Ottaway business was founded in 1936 when James H. Ottaway bought the Bulletin in Endicott, New York, according to Dow Jones’s website.
The Local Media Group also includes Middletown, New York’s Times Herald-Record; Stockton, California’s Record; New Bedford, Massachusetts’ Standard-Times; Stroudsburg, Pennsylvania’s Pocono Record; Portsmouth, New Hampshire’s Herald; and Medford, Oregon’s Mail Tribune.
Waller Capital Partners advised News Corp. on the sale.