Another media company shedding newspapers ...
Cox announcement means one less suitor for Landmark newspapers

By JIM BROOKS
Nelson County Gazette

Wednesday, August 13, 2008, 11:45 p.m. -- While readers -- and employees -- of The Kentucky Standard wait for an announcement of who will buy the community newspaper's parent company, LCNI, another newspaper chain announced today it is also selling off most of its newspaper holdings.

Atlanta-based Cox Enterprises announced Wednesday that it will sell 14 of its 17 daily newspapers. It will keep only three -- the Atlanta Journal-Constitution, the Dayton Daily News and the Palm Beach Post in West Palm Beach, Fla. Cox is also expected to sell its 26 non-daily community newspapers, which are located primarily in North Carolina, Ohio, Colorado and Texas.

The company is also selling its direct mail advertising division, Valpak.

Like Landmark Communications, Cox is a privately-held media company. Amid slumping revenues among its newspaper group, Cox is raising cash to invest in its more profitable operations, which include cable TV and automotive auctions.

In an interview published by the Atlanta Journal-Constitution, John Morton, a newspaper analyst, said the sale suggested that Cox, like other media companies across the country, has lost faith in the ability of newspapers to rebound after several years of steady declines.

"Will the market get better?" Morton told the Constitution. "Clearly some companies, and Cox, have concluded that it won't."

Most newspaper properties have lost half their value in just five years, Morton said.

Several other media companies have recently announced the sale of newspaper properties, including Copley Press Inc., which is selling the San Diego Union-Tribune, and Landmark Communications, which is offering for sale regional newspapers in North Carolina and Virginia and its community newspaper company, LCNI.

"You are selling at the bottom of the market," Morton said.

Sanford Schwartz, the Cox president over the newspaper division, called it a "tough market" for newspapers. But Schwartz said the Cox newspapers to be sold are some "really attractive properties."

"I expect there will be a number of buyers lining up," Schwartz said. He said the company has no plans to sell its newspapers in Atlanta, Dayton and West Palm Beach, which are moving aggressively to contain costs and establish strong online readerships.

Cox has hired Citigroup to manage the sale of its newspapers and Goldman Sachs to market Valpak.

Schwartz said he did not expect the first sale to occur before the first quarter of 2009.

Landmark sales continue

Landmark announced the sale of its highly valued cable TV channel, The Weather Channel, to NBC Universal and two private equity firms. NBC and Landmark did not disclose the price, but people close to the negotiations pegged it at about $3.5 billion -- a figure that fell significantly shy of the channel's estimated $5 billion value in better economic times.

Last month Landmark also announced the sale of its NewsChannel 5, the CBS affiliate in Nashville, to Bonten Media Group Inc. in New York. Bonten was formed in 2006 by Bongarten and Diamond Castle Holdings LLC, a private equity firm in New York. It has 16 stations. Landmark purchased the Nashville TV station in 1992.

Negotiations presumably continue on the sale of Landmark's daily and non-daily newspapers. In January, religious broadcaster Pat Robertson said his attorneys were looking into a bid for Landmark flagship newspaper The Virginian-Pilot.

In January, Landmark officials said the sale of the properties could take six months or more to complete.