2004 Annual Report - Newspaper Ownership

There was a slight increase in the mergers and acquisitions front in 2003, although still not to the levels reached from the mid-1990s through 2000, during which The Tribune Company purchased Times Mirror and Gannett bought Central Newspapers.

Perhaps the most meaningful sale in 2003 was that of the family-owned Freedom Communications, a 65-newspaper chain, which includes The Orange County Register in California and 27 other dailies. According to Advertising Age, the chain had newspaper revenues of $662 million in 2002.⁹ In the end, it was sold to a consortium of family members. But the highest of a number of bids were from Gannett and MediaNews. That could signal that a faster pace of acquisitions is about to resume - though there are probably not so many desirable properties left as in the l980s and l990s.

The other major story in the newspaper industry was the continued fight between The Seattle Times and The Seattle Post-Intelligencer. The two papers have a joint operating agreement under which The Times (which is 50.5 percent owned by the Blethen family and 49.5 percent by Knight Ridder) has merged non-editorial operations and splits any profit earned with the Hearst-owned Post-Intelligencer. The Times says it has lost money for three consecutive years and has sued to end the operating agreement, which Hearst has said would lead to closing The Post-Intelligencer. A September 25th 2003 court decision ruled against the Times, not allowing the first year of its loss to be counted inside the operating agreement because it was incurred partly because of a strike. This keeps the agreement active for another year, but the battle will continue in 2004.

And the prospect that Hollinger newspapers would be sold due to financial improprieties by its top executives, including the press baron Conrad Black, is a further signal of more merger activity to come. Still more mergers are possible, too, given intentions by the Federal Communications Commission to allow companies to own outlets across different media platforms (newspapers and television stations, for example) in the same community. (See Local TV). But Congressional and judicial action blocking the FCC deregulation for the moment has put the prospect of such deregulatory merger activity on hold.