News Corp. Is Said to Consider Sale of Community NewspapersEdmund Lee
News Corp. is considering the sale of its Dow Jones Local Media unit, a group of community papers such as the Cape Cod Times in Massachusetts and Oregon’s Ashland Daily Tidings, a person familiar with the deliberations said.
The New York-based company has hired the investment bank Waller Capital to seek potential buyers for the papers, said the person, who asked not to be named because the plan isn’t public. Nathaniel Brown, spokesman for News Corp., declined to comment, as did Ed Adler, a representative for New York-based Waller.
Rupert Murdoch, News Corp.’s founder and chief executive officer, is grooming the company’s publishing division in preparation for a spinoff this year. News Corp. is splitting the business from its entertainment operations, which will be called Fox Group Inc. The company agreed to the spinoff last year, bowing to pressure from shareholders who wanted the company to focus on its more valuable television and film businesses.
The new publishing company reported a pro forma net loss of $1.89 billion in the fiscal year that ended on June 30, with sales of $9.14 billion. The loss included $2.6 billion in writedowns, mostly from reductions in the value of newspapers.
News Corp. originally attempted a sale of its community newspapers in 2008, at the height of the U.S. credit crisis, according to another person with knowledge of the matter. News Corp. couldn’t attract any bidders at the time, the person said.
The community-paper division 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. Its papers now include the Times Herald-Record in Middletown, New York; the Pocono Record in Stroudsburg, Pennsylvania; Nantucket Today in Massachusetts; and the Record in Stockton, California.
The Wall Street Journal, which is owned by News Corp., previously reported on the sale discussions.
News Corp. shares fell 0.9 percent to $30.74 at the close in New York. The stock has climbed 21 percent this year.
Warren Buffett, the world’s third-richest person, has emerged as one of the biggest acquirers of community newspapers in recent years. His company, Berkshire Hathaway Inc., has purchased more than 80 newspapers for more than $342 million. Local papers that deliver reliable information to “tightly bound communities” with a sensible Internet strategy will stay viable, Buffett has said.
Buffett didn’t respond to a request for comment sent to an assistant.