Readers, journalists, and Central Ohio community leaders continue to assess the startling news that Columbus's landmark newspaper soon will have out-of-town owners.
After more than a century of ownership, the Wolfe family plans to sell The Dispatch to The New Media Investment Group. The New York based company has been buying a lot of newspapers lately.
Unlike the Wolfe family, New Media Investment Group is a relative newcomer to journalism. Poynter Institute media business analyst, Rick Edmonds, says the New York City company specifically targets purchase of newspapers.
"It was known and may still be better known as Gatehouse publishing formed out of yet another company about six or seven years ago and then it went through a bankruptcy re-organization and merged and basically recapitalized with quite a lot of money to acquire newspapers," says Edmonds.
During the first six months of 2015, New Media has spent more than $300 million buying newspapers. It currently owns 126 daily newspapers 32 states.
We don't know the purchase price of the Dispatch and its associated publications.
Securities and Exchange Commission filings show New Media last fall paid $48 million for the smaller Providence Journal.
New Media is taking on a lot of debt to build its portfolio. Its balance sheet lists $359 million in long term debt.
But, New Media's advertising revenues are up nearly double what they were a year ago. The firm posted $143-million in ad revenue for the first quarter of this year, up from $82-million dollars for the same period last year.
Edmonds says New Media is a publishing company very focused on the bottom line..
"It is a little different from most newspaper companies in that it pretty strongly emphasizes that it pays a good dividend to shareholders. And, it's been pretty popular on Wall Street,"
New Media stock has gained 45 percent in the past twelve months.
Pew Center Director of Journalism research, Amy Mitchell, says New Media views the Dispatch purchase as a catalyst to speed cash flow to both service debt and continue to pay shareholder dividends.
"They are clearly making a choice to see that as an investment that they're taking on and so this will be adding to that and as one of the largest looks to be one they'll see as prominent among the papers they have," says Mitchell.
New Media has centralized much of its editing and web design operations in Texas in an effort to reduce operating costs. Published reports say New Media offered some employee buy-outs at the Providence paper. The company has not disclosed lay-offs at any recently purchased papers. The purchase of the Dispatch is expected to be completed by the end of June.
