Friday, March 16, 2007

Nine Copley papers in Ohio, Illinois sold for $380 million

By Dean Calbreath STAFF WRITER
March 14, 2007

The Copley Press Inc., parent company of The San Diego Union-Tribune, ended its century-long history in the Midwest yesterday with an agreement to sell its nine newspapers in Illinois and Ohio for $380 million.
The newspapers – seven dailies and two weeklies – were bought by GateHouse Media Inc., which owns 76 small daily newspapers and about 370 other community publications across 18 states.
"We look forward to continuing the outstanding stewardship of Copley Press," said Michael E. Reed, GateHouse Media's chief executive. "These newspapers are dominant local news providers in the markets they serve, with a rich tradition of journalistic excellence and local advertising reach."
The sale will allow Copley Press to focus on its flagship, said David C. Copley, chairman and chief executive officer of the company and publisher of the Union-Tribune.
"A primary goal of putting these properties up for sale was to ensure the company's ability to keep The San Diego Union-Tribune in the first tier of American newspapers and to make sure that we could maintain its independence in the future," Copley said.
Larry Grimes, who runs Maryland's W.B. Grimes & Co., which specializes in media mergers, said the purchase fits with GateHouse's growth strategy.
"They've been on somewhat of a buying streak since they went public a few months ago," Grimes said. "They're trying to upgrade their portfolio of holdings by moving more to midsized dailies and larger weeklies instead of smaller community newspapers."
The sale is expected to close by late April, pending regulatory approval and other conditions.
Once the sale is finalized, Copley will own no newspapers other than the Union-Tribune, the third-largest paper in California and 23rd largest in the nation; Today's Local News, a community paper in northern San Diego County; and the twice-monthly Borrego Sun.
The company also owns Copley News Service, with bureaus in Washington, D.C., Sacramento, Mexico City and Los Angeles, and Casa del Zorro Resort in Borrego Springs.
The Copley Press was founded in Aurora, Ill., in 1905 by Ira Copley, a 39-year-old lawyer who previously worked in the gas and electric industry. By the time of his death in 1947, Copley owned newspapers in Aurora, Joliet, Elgin and Springfield, Ill., as well as the The San Diego Union and Evening Tribune – then separate newspapers – and 11 papers in the Los Angeles area.
Ira Copley's son James, who succeeded him, moved the corporate headquarters from Aurora to San Diego. After his death in 1973, the company was headed by his wife Helen until her death in 2004 and has since been run by their son David.
Copley officials have said the sale of the Midwestern newspapers was prompted in part by the need to pay estate taxes that came due after Helen Copley's death. Copley's remaining Los Angeles area newspapers were sold to Hearst Corp. in December. MediaNews Group will operate those papers and eventually own them under the terms of that deal.
"The sale of the Illinois and Ohio papers was inevitable," Grimes said. "The Copley family interests are out west."
GateHouse, formerly known as Liberty Media, has a "hyper-local" strategy of focusing on small-town newspapers to avoid direct competition with larger media outlets, newspaper analysts said.
The Illinois daily papers involved in yesterday's sale are: The State-Journal Register in Springfield, The Courier in Lincoln, the Journal Star in Peoria and The Register-Mail in Galesburg. The Ohio dailies are: The Repository in Canton, The Independent in Massillon and The Times-Reporter in New Philadelphia.
The combined circulation of the dailies is 241,060.



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