In a memo to employees announcing the sale of the Connecticut Post and seven nearby publications to Hearst Corp., Dean Singleton, the chieftain of MediaNews Group, which owns the Denver Post and more than a hundred other U.S. newspapers, did his darnedest to put a positive spin on the development. But he and Jody Lodovic, the fellow executive who is listed as a co-author of the missive, apparently didn't think to have their minions update the MediaNews website, which at this writing features a chipper (and notably out-of-date) promo about the "Connecticut Expansion" as the most prominent item on its home page.
Here's the way Singleton and Lodovic explained their most recent actions in the aforementioned memo:
Why did MediaNews sell the Connecticut Post? While we were not looking to sell the Connecticut Post, we took advantage of an opportunity to accomplish several important objectives. First, proceeds from the sale were used to repay almost 25% of our outstanding bank debt. Secondly, the transaction provided a unique opportunity to approach our bank lenders with a "win-win" proposition. In exchange for the large repayment, our banks agreed to relax certain key aspects of our credit agreement to provide more room to navigate over the coming years. In sum, the sale, coupled with the changes to our credit agreement, provide us the runway we need to execute our strategic plans, position the Company to be opportunistic, and continue to lead the industry into the future.
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And here's a very different press release, dated October 24, 2007, which discusses an agreement for MediaNews to manage two properties -- The Advocate and Greenwich Time -- which Hearst will now take over, and namechecks The News-Times of Danbury, another paper Hearst is set to manage in the future.
FOR IMMEDIATE RELEASE
DENVER, CO, October 24, 2007 - MediaNews Group, Inc. (MediaNews) today announced the expansion of its Connecticut joint venture with The Hearst Corporation (Hearst). In a separate transaction announced today by Tribune Publishing, Hearst will acquire The Advocate (Stamford) and Greenwich Time. An existing joint venture agreement between MediaNews and Hearst, which includes the Connecticut Post and The News-Times (Danbury), will be amended to include The Advocate and Greenwich Time. MediaNews is the manager under the agreement and will retain 60 percent of the profits from the venture. The transaction is expected to close within the next few weeks.
"We are delighted to add The Advocate and Greenwich Time to our growing Connecticut cluster," said Dean Singleton, Chief Executive Officer of MediaNews. "As a result of our increased reach in Fairfield County and added editorial resources and efficiencies provided by our Connecticut joint venture, each of the newspapers, as well as our advertisers and readers, will benefit," added Singleton.
About MediaNews Group, Inc.
MediaNews is the nation’s fourth largest newspaper company, with headquarters in Denver, CO. MediaNews and its affiliated companies publish 58 daily newspapers and approximately 100 non-daily publications in 13 states with daily and Sunday circulation of approximately 2.6 million and 3.0 million, respectively. In addition, MediaNews owns a CBS affiliate in Anchorage, Alaska and four radio stations in Texas. MediaNews maintains web sites for all of its daily newspapers.
Obviously, much has changed in the past ten months. As of late June, according to this Rocky Mountain News report, some ratings agencies feared MediaNews would default on its considerable debt by the end of 2008 -- a theory that earned a ringing denial from Singleton and Lodovic in a subsequent statement. Still, the sale demonstrates how serious the financial situation is, since the Connecticut papers represented one of the best examples of MediaNews' clustering concept, which called for the firm to hoover up as many publications in an area as possible as a way of reducing costs via economies of scale.
The notion worked well a few years ago, when the newspaper business was humming along. Now, however, even Singleton admits that he's not in an acquisitive mood. Don't be surprised if he deals other newspapers in an effort to protect those he cares about most -- including, presumably, the Post. -- Michael Roberts