Stephens Media to sell most of newspaper assets

New Media Investment Group Inc. said Thursday that it would acquire "substantially all" assets of Las Vegas-based Stephens Media LLC in a cash deal worth $102.5 million.

The acquisition includes eight daily newspapers along with 65 weekly newspapers and niche publications and 50 websites in states including Arkansas.

The purchase does not include the Northwest Arkansas newspapers co-owned with Stephens Media by Little Rock-based WEHCO Media, Inc. WEHCO owns seven newspapers and other newspaper holdings in Arkansas, Tennessee and Missouri, including the Arkansas Democrat-Gazette, the state's largest newspaper.

Walter E. Hussman Jr., publisher and chief executive officer of WEHCO Media, said he was pleased that Stephens is retaining its part ownership in Northwest Arkansas Newspapers Inc. and the newly consolidated Northwest Arkansas Democrat-Gazette.

"We've had a very good partnership with [Stephens] and hope to continue it for the long term," Hussman said. "We're also pleased to see that the Northwest newspapers are going to remain owned by Arkansans."

The consolidated daily newspaper in Northwest Arkansas melded the Benton County Daily Record, the Rogers Morning News, the Springdale Morning News, the Northwest Arkansas Times and the Arkansas Democrat-Gazette, Northwest edition. The intent was to give readers and advertisers one brand to identify with and provide a more comprehensive news package that is easier to navigate.

Ten weekly papers were unaffected in the consolidating move made last month and will remain co-owned by WEHCO and Stephens Media. The joint venture of WEHCO and Stephens in Northwest Arkansas took place in 2009.

When Stephens sold some newspapers to New Media late last year, "it seemed logical that they were moving out of newspapers as an investment," Hussman said.

The Stephens assets that will be sold have a combined average daily circulation of about 221,000 and 244,000 on Sunday, New Media said in a release Thursday. Stephens' largest newspaper is the Las Vegas Review-Journal; its second largest is the Southwest Times Record in Fort Smith. Both go to New Media.

Tom Stallbaumer, publisher of the Southwest Times Record since 2013, had little to say when contacted late Thursday.

"At this point, I really don't have a comment on it," he said. "I found out about it at the same time I think everybody else in the world did."

A letter from Stephens Media CEO Ed Moss sent to employees about 4:30 p.m. Thursday said the transaction is expected to close before the end of March. More details would be forthcoming, he said.

Correspondence to employees from Kirk Davis, CEO of GateHouse Media LLC -- the operating platform for all publications owned by New Media -- said he and a few of his colleagues would be visiting the Stephens-owned newspapers starting Monday.

The newspapers involved in the deal "represent a nice combination of synergies with our adjacent properties and/or increase our presence in other attractive states," Davis said.

Stephens Media will retain a minority ownership in a group of California newspapers, said Warren Stephens, co-owner of Stephens Media and chairman, president and CEO of Little Rock-based Stephens Inc., a financial services firm. Stephens Inc. has until now served as exclusive financial adviser to Stephens Media.

"We've owned these assets for 22 years," Stephens said. "It's a little bit of a bittersweet day, but it was a great investment for us."

The purchase price was subject to working-capital investments, the New Media release said.

"These award-winning, daily newspapers are the trusted source of local news in their communities providing journalistic excellence for more than 100 years," New Media President and CEO Michael Reed said in the release.

"The portfolio is anchored by an attractive set of print publications with a strong community focus, solid readership base, and stable advertisers with limited customer concentration," he said.

In New Media's first year as a publicly traded company, it entered into agreements to acquire about $457 million of media assets, including those owned by Stephens.

Information for this article was contributed by David Smith of the Arkansas Democrat-Gazette.

Business on 02/20/2015