The Rise of a New Media Baron

As profits and readership declined rapidly over the past decade, causing immense disruption in the industry, newspaper empires built in the 20th century fell, and a new type of newspaper owner rose to power.

Some of the largest newspaper companies today did not exist in 2004. Private equity funds, pension funds and other investment partnerships have moved quickly to acquire hundreds of distressed papers. They’ve purchased entire chains that have been forced into bankruptcy, as well as smaller private newspaper companies whose longtime owners have given up struggling to adapt economically and technologically to the digital era.

Today, seven of the largest 25 newspaper ownersiii are investment groups. Their recently established empires are surpassing in size the large chains of the 20th century, and they are still growing as they continue to snap up more and more ink-on-paper newspapers at bargain prices while disposing of unprofitable ones. Unlike the local owners of the past who had a stake in their communities, or the professional managers who ran those large 20th century chains, these new newspaper owners focus almost exclusively on driving the performance of their holdings, of which newspapers are often a small and expendable part. The decisions that these new newspaper owners make and the business strategies they pursue over the next few years will determine whether these newspapers survive and in what form.

iii “Largest” is determined by number of newspapers owned, not total circulation.


Over the past century, there have been three types of newspaper owners. The founders, who established iconic newspaper brands such as The New York Times or the Chicago Tribune, dominated the industry in the first half of the 20th century. They were succeeded by corporate newspaper managers in the second half of the century who built large chains, including Gannett and Knight Ridder. Now, in the last decade, investment entities, run by financial portfolio managers, have quickly assembled newspaper groups that dwarf the big chains of the 20th century.

Newspapers in this country are equal parts business enterprises and civic institutions with special constitutional protections. With each generation of newspaper owner, there has been debate about how to prioritize obligations to the public versus those to major shareholders. The newest generation of media barons — the investment portfolio managers — are not journalists nor do they share journalism’s traditional civic mission. Their priority is maximizing the return on the assets in their diverse portfolios. Therefore, their rapid ascent raises new and pressing concerns about the responsibilities of newspaper owners in the digital age.

A technological innovation in the 19th century, the steam-powered printing press, gave rise to the first generation of newspaper barons. It allowed newspapers to print and distribute their newspapers to mass audiences, which, in turn, attracted the attention and dollars of advertisers who paid to reach these readers. In the era before radio and television, many newspaper barons amassed great wealth and often wielded tremendous political influence. William Randolph Hearst and Joseph Pulitzer, competing in the era of “yellow journalism,” famously used their big-city newspapers to inflame passions leading up to the Spanish-American War.

However, in towns and cities across the country, newspapers were largely owned by local residents. These publishers and their editors often had political clout in their states and cities, but—whether conservative or liberal—they had cultural and economic constraints. If they did not serve the interests of their readers and advertisers, they risked losing business to a competing paper. So, in contrast to the “yellow journalists” of their time, owners such as the Ochs family, which owned the Chattanooga

Times and then The New York Times, or the Bingham family, which owned the Louisville Courier-Journal, worked to establish a reputation for editorial excellence and fairness. In the process, these early newspaper barons established the modern, multi- subject newspaper and became the dominant advertising option for most local businesses.

As radio began to draw audiences and advertising in the 1920s, some of these owners concluded they needed to own more than one or two newspapers to remain competitive with both readers and advertisers. E.W. Scripps and Hearst assembled the first large privately owned “chains,” consisting of 20 or more papers in cities across the country.11 Concerns were immediately voiced about the span and influence of these new chains, but they faded as radio and television began to amass even greater audiences. By 1960, 32 percent of newspapers were owned by a chain, and the early potent media barons had been replaced by a second generation of owners.12

Professional managers held most of the executive positions in the large newspaper chains that arose in the latter half of the 20th century. But, in contrast to many other corporations, the newspaper business remained largely a family- centered enterprise. The large chains bore the name of the founders—Gannett, Lee, Knight Ridder, Dow Jones—or the name of the flagship paper—Advance, The New York Times, the Tribune. Often, descendants of the founder held the top posts of publisher, editor, CEO or chairman.

Between 1960 and 1990, another trend emerged: One after another competing paper in communities across the country ceased publication. In an effort to preserve “diverse” viewpoints in major metro areas and save the surviving newspapers, the Department of Justice often approved joint operating agreements that allowed two competing papers to merge business operations. But in the small and mid-sized markets, only one newspapers usually survived. These papers became de facto monopolies, the prime source of news in their communities as well as the only viable advertising option for local businesses. At many such newspapers, profit margins soared to 20 percent and even 40 percent. The large chains competed with one another to acquire these papers.

Some large companies — such as Hearst and the Newhouse/Advance group — chose to remain private and financed their acquisitions either through debt or profits from their own newspapers. Several big-name newspaper companies — Gannett, Knight Ridder, Lee, McClatchy, Pulitzer, Scripps, Dow Jones, The New York Times and The Washington Post — raised capital for acquisitions by selling stock on either the New York or American stock exchanges. Some bought television stations and magazines, too. By 2000, chains owned more than 90 percent of all American newspapers.13 Most privately owned chains — for example, Shaw Media and Boone — were smaller than the publicly traded chains and typically confined themselves to a specific geographic region.

Publicly traded chains had to be attentive to their shareholders, a development that raised concerns as to whether powerful newspaper corporations would put shareholder expectation ahead of substantive journalism and their responsibilities to the community. However, since most newspapers sold for 13 times yearly earnings,iv large chains still had a strong financial incentive to take the long-term view when evaluating whether to purchase a newspaper.14 To allay concerns, such publicly held companies as The New York Times, The Washington Post and Dow Jones created dual classes of stock, giving the founders’ descendants controlling voting rights. Other chains, such as Knight Ridder, Times Mirror and McClatchy, focused on winning Pulitzer Prizes and other journalism awards to enhance their reputation, as well as their brand, in the marketplace.15

The transition to the current generation of newspaper baron began in the 1990s. The newspaper industry recorded historic levels of advertising revenue, profitability and circulation in the 1980s and 1990s.16 Seeing that newspapers produced a steady and reliable source of income, institutional investors — including hedge and pension funds — bought shares in publicly traded newspaper companies.

At first, hedge and pension funds were, by and large, passive investors. In 2000, however, print advertising revenue began a dramatically steep decline. By 2005, some passive investors had become activist shareholders, pressing newspaper companies to pursue new strategies and advocating selling entire companies. In 2006, for example, three hedge funds, acting in concert, compelled Knight Ridder, with 61 papers and more than 4 million in circulation, to sell to McClatchy, then a much smaller company.17

The financial crisis and Great Recession of 2008–2009 exacerbated the already considerable economic woes of newspapers. With newspaper valuations at historic lows, hedge funds, private equity partnerships and publicly traded investment entities began snatching up hundreds of properties, mostly in small and mid-sized communities.

In 2004, the legacy chains of the 20th century still dominated the list of the nation’s largest newspaper companies. By 2014, a mere decade later, they had been supplanted by the investment groups that had grown overnight by purchasing distressed legacy companies. The once-passive investors had become full-fledged owners and operators.

As if to distinguish themselves from the iconic newspaper chains of the previous century named after their founders, these new media barons adopted corporate-sounding names—New Media/ GateHouse, Digital First, BH Media, Civitas, 10/13 Communications. Few in the top management ranks had journalistic experience or passion. They viewed newspapers as investments—one of many in their portfolio of businesses.

iv Newspapers have historically been valued based on the financial benchmark EBITDA, which stands for “earnings before interest, taxes, depreciation and amortization” are deducted. The net income figure listed on a company’s financial statements includes payments and deductions for these items, which can fluctuate widely year to year. Therefore EBITDA is considered a more reliable measure of a company’s operating efficiency over the long term.


In the late 1990s, as newspaper profits soared, several privately held investment firms began to quietly purchase small newspaper chains as they came on the market. By 2004, two of these companies had accumulated more than 300 papers between them and had become the second- and fourth-largest chains in the country, in terms of number of newspapers owned. However, most of the papers they owned were in small markets, so their arrival went unnoticed by industry professionals and analysts, who focused on circulation in determining the biggest newspaper companies. Using circulation as a yardstick, the chains assembled in the latter half of the 20th century — Gannett, Knight Ridder and Advance, among others — still topped the list.

The Largest 10 Companies by Circulation of Newspapers: 2004

The size and span of influence of newspaper companies can be calculated either in terms of total circulation or number of papers owned. Until recently, the newspaper industry has largely used circulation as the primary standard.

And yet, in assessing the reach of newspaper owners across many communities, the number of papers controlled is an equally important measurement. In a city of 100,000, for example, a newspaper owner would have roughly the same influence whether its publication had circulation of 20,000 or 30,000. Meanwhile, an owner of four newspapers with 5,000 circulation in four towns would have influence in each of those localities, even with circulation below the newspaper in a mid-size city.

With circulation as a measurement, big-name, well-recognized companies founded in the 20th century dominated the field in 2004. Three of the largest five companies — Gannett, Knight Ridder and Tribune Co. — were publicly traded. They had combined circulation of 14.6 million. The third- and fifth-largest chains — Advance Publications and MediaNews Group — were private companies. They had a combined circulation of 6.8 million. The 10 largest companies had a combined circulation of 30 million, or more than a fourth of the total circulation in the country.

When the number of newspapers owned is used as a measurement, instead of circulation, a very different picture emerges. In 2004, the top five companies ranked by newspapers owned were Gannett, Liberty Group Publishing, the Journal Register Co., Community Newspaper Holdings and MediaNews Group.

Liberty Group Publishing and Community Newspaper Holdings Inc. (CNHI)—along with American Community Newspapers (ACN)—had been formed at the end of the 1990s, when newspaper revenue and profits were near their peak.18

The Largest 25 Companies in 2004, Ranked by Number of Newsapers Owned

For Knight Ridder, Advance and their legacy newspaper peers, ink-on-paper publications brought in robust revenue and profit, a portion of which financed their mission as providers of news and information.

In contrast, these three privately held investment entities — Liberty Group Publishing, CNHI and ACN — viewed newspapers as investments, pure and simple. Statements by these firms’ investment managers described small newspapers, most with circulation of less than 10,000, as reliable and consistent sources of income for their portfolios of diverse business assets. Small rural markets, they believed, would be relatively insulated in the coming years from competition — either from traditional media, such as television, or the internet, which was then still in its infancy.

  • Community Newspaper Holdings Inc. (CNHI) was founded in 1997, as part of a diverse portfolio of investments made by the Retirement Systems of Alabama. CNHI initially acquired papers from Media General and Hollinger International, as well as additional properties from Thomson in 2000 and Ottaway in 2002.19
  • Liberty Group Publishing, established in 1998, was financed by Leonard Green & Partners LP, a Los Angeles-based private equity firm that specialized in turning around troubled companies. Liberty Group Publishing initially purchased 160 papers from Hollinger International, which was selling 40 percent of its U.S. community group in an effort to pay down debt.20
  • American Community Newspapers was established in 1998 as Lionheart Holdings with the financial backing of Weiss, Peck & Greer’s private equity group and Waller-Sutton Media Partners LP. It quickly grew through the acquisition of E.W. Scripps Co.’s Dallas Community Newspaper Group and three major purchases from families in Minnesota and Kansas. Lionheart Holdings was rebranded as American Community Newspapers in 2002.21

In 2004, these investment groups held 352 papers — or 20 percent of all the papers owned by the largest 25 companies. But because these companies had purchased small papers, they controlled only 7 percent of the circulation among the top 25 group.

All that would change over the coming turbulent decade as other investment groups moved in, displacing the media barons that dominated the charts in 2004. For their part, Liberty Group Publishing and American Community Newspapers went through multiple iterations over the course of the decade as the investment firm managers reshuffled their portfolio, making numerous acquisitions and divestitures. After bankruptcy in 2009, American Community Newspapers ceased to exist, its newspapers sold off to other large companies by its creditors.22 After several financial restructurings, Liberty Group Publishing morphed into New Media Group/GateHouse. In 2014, only Community Newspaper Holdings Inc. existed much as it had in 2004, but with two dozen fewer newspapers.


Hedge funds and pension funds also began betting on newspapers in the 1990s, seeing them as “safe” investments. Numerous institutional investors began acquiring stock in publicly traded companies — such as Knight Ridder and The New York Times Co. As the migration of readers and advertisers to the internet increased in the early years of the 21st century, many began agitating boards and executives of these chains to make changes or sell their newspaper empires. In the wake of the 2008–2009 Great Recession, the valuations of newspapers dropped almost overnight. Suddenly passive investors — hedge funds and private equity funds — decided it was time to buy newspapers. Since 2010, they have been acquiring papers at bargain basement prices and assembling large chains.

Newspaper advertising revenue peaked in 2000 at $64 billion, adjusted for inflation. In the wake of the dot-com bust and the short recession that accompanied the 9/11 terrorist attacks, revenue declined sharply.

By 2004, various institutional investors — including hedge and pension funds — had accumulated between 40 and 57 percent of the shares in publicly traded media companies.23 But each of the firms held only a small percentage of any company and were usually passive investors. The revenue plunge served as a wake-up call for hedge fund and pension fund managers, who began aggressively questioning newspaper executives about their digital strategies. Some lobbied boards of directors to “consider all strategic alternatives,” including sale of the company.

In the years leading up to 2008, newspapers in small and mid-sized markets with very little competition typically sold for 13 times annual earnings. This meant that new purchasers needed to own a paper for at least 13 years in order to recoup their investment. 24 As entire legacy companies — such as Pulitzer and Knight Ridder — became available, other legacy companies became active bidders. In addition to paying a premium price to acquire a newspaper company, many buyers took on substantial debt.

In 2005, large public and private companies spent $3 billion acquiring papers from one another. Lee Enterprises led the way, paying $1.5 billion to acquire the Pulitzer group.25

In 2006, more than $10 billion changed hands, with the McClatchy Co., which had 27 papers in 2004, purchasing all of Knight Ridder’s 61 papers for $4 billion. McClatchy then sold four papers to MediaNews Group and Hearst in a transaction valued at $1 billion.26

In 2007, sales hit $20 billion, driven by News Corp.’s $5.6 billion acquisition of Dow Jones and the $8.2 billion purchase of the Tribune Co. by Sam Zell, a real estate mogul and private equity fund manager.27

Between 2005 and 2008, newspaper advertising revenue continued its downward trajectory, even as newspaper publishers scrambled to sell more digital advertising to compensate for the loss of print revenue. Despite this, investors remained somewhat bullish on newspapers in small and mid-sized markets, where print advertising declined less rapidly.28

As the nation focused on a historic presidential election, and Wall Street and Main Street slipped toward a stunning downturn; 2008 turned out to be a pivotal year in newspaper ownership.
The 2008–2009 Great Recession decimated the print advertising revenue of papers in both large and small markets. This paved the way for the transition of institutional investors from minority shareholders to outright owners and operators.

Total Amount Companies Spent to Acquire Newspapers: 2002-2015

At the beginning of 2009, the market capitalization of publicly traded companies such as Gannett, McClatchy and Lee had fallen more than 80 percent.29 As a result, newspapers were being valued by investment firms that typically arranged financing at only three to five times yearly earnings. This meant acquirers could potentially sell, or “flip,” a newspaper in three to five years and make a profit on the sale. Instead of the “buy and hold” strategy practiced by the legacy newspaper companies who had paid 13 times earnings before 2008, purchasers of newspapers since 2008 have been able “buy and sell” properties more frequently. Also, at substantially reduced sales prices, companies have been able to buy multiple newspapers for the same price they would have paid for only one previously.

The total amount of money spent on acquisitions spiked in 2007, fell dramatically in 2008 and has hovered below 2004 levels since.

Most of the major purchasers before 2008 took on substantial debt to pay for their acquisitions.30 As newspapers’ revenues and profits plummeted in the wake of the Great Recession, Lee Enterprises, Tribune Company and MediaNews Group, among others, were forced into bankruptcy proceedings by 2012.

With the large legacy companies mostly shut out of the market, recently formed investment companies were well-positioned to purchase not only newspapers at bargain prices, but also entire companies that had filed for bankruptcy or were disposing of properties to pay down debt. Consequently, by 2012, the number of major newspaper acquisitions had rebounded to previous levels. But, because of the lower valuations of newspapers, the total dollars spent on acquisitions has been less than $1 billion in every year since 2007. In 2010, the trough year, only $149 million was spent. By 2012 sales bounced back to $643 million and reached a post-recession high of $827 million in 2015.


More than a third of all newspapers — 2,906 — have changed ownership at least once since 2004. Newly formed investment firms — both privately held and publicly traded — have been the most aggressive purchasers since 2008. As a result, seven of the largest 25 newspaper companies by 2014 were investment firms.

The Largest 25 Companies in 2014, Ranked by Number of Newspapers Owned - A Rise of New Media Barons

The path from 2004 to today has been a convoluted one, featuring high newspaper turnover, numerous company mergers and acquisitions, and new actors entering the fray. Ten of the 25 largest companies in 2004 were purchased either in full or in part by other companies. Six of the largest 25 companies in 2014 had not existed in their current form in 2004, including five investment firms. Six privately owned traditional newspaper companies grew enough to make the list, three other private companies dropped off the list and one (Suffolk Life Newspapers) ceased operations.

By 2014, six of the 10 largest newspaper owners, measured by their number of newspapers, were investment entities:

  • Liberty Group Publishing, purchased by Fortress Investment Group in 2005, morphed into New Media/GateHouse and became the largest chain, with 379 newspapers.31
  • Digital First Media, formed in 2011, was the second largest, with 208 papers.
  • Community Newspaper Holdings Inc., formed in 1997, had 21 fewer papers than in 2004, but still ranked fourth with 128 papers.
  • Sixth-ranked Civitas Media, formed in 2012, had 98 papers.
  • Tribune Publishing was seventh largest, with 95 papers; it had gone through two corporate restructurings and a bankruptcy between 2008 and 2014.
  • BH Media, a division of Berkshire Hathaway formed in 2012, had 76 newspapers and was the ninth-largest company.32

In all, seven investment entities ranked among the largest 25 newspaper owners in the country in 2014, including the 18th largest, 10/13 Communications, formed in 2009.

The seven investment entities owned twice as many dailies in 2014 as in 2004, and three times as many nondailies. They controlled six times as much circulation, expanding from 2.5 million in 2004 to 15.3 million in 2014. Consequently, ranked in size by circulation, four of the largest 10 newspaper companies in 2014 were also investment entities.

  • Digital First Media was second largest, with 4.5 million circulation
  • Tribune Publishing was third, with 3.4 million.
  • New Media/GateHouse, fourth largest, had 3.1 million
  • BH Media, ninth, had 1.4 million

The Largest 10 Companies by Circulation of Newspapers (Public, Private and Investment): 2014

How Ownership Changed Among the Largest 25 Investment, Public and Private Companies: 2004-2014As investor ownership expanded, the number of large publicly traded companies declined from six to only three. By 2014, Knight Ridder, Pulitzer and Media General had been acquired by one of the other large companies. This left only Gannett, Lee and McClatchy among the 25 largest companies.

Gannett remained the largest company as ranked by total circulation, and the third largest in terms of newspapers owned. Lee had become the fifth largest in terms of number of newspapers, and eighth largest in circulation. McClatchy was the fifth largest in circulation and 12th largest in numbers of papers.

Overall, the number of newspapers owned by the largest publicly traded companies had dropped to 377, from 576, and the combined circulation had declined to 9.3 million, from 16.9 million.

There was also turnover among the largest private chains. Some, such as Advance and Hearst, hunkered down and remained largely intact. Others, such as MediaNews and Suffolk, filed for bankruptcy and were purchased by investment firms or closed.33 Still, others—especially the small regional chains such as Boone and Rust—selectively acquired papers that came on the market in the post-recession years. As a result, the overall number of newspapers owned by the 16 largest private companies fell only slightly, to 791 in 2014, from 848 in 2004. However, combined circulation for the large private companies declined by a third—to 9.8 million.

By 2014, the seven largest investment groups dominated both in terms of number of newspapers owned and total circulation. They owned 240 newspapers more than the 16 largest private chains and 654 more than the three publicly traded chains. Their combined circulation had grown from a paltry $2.5 million in 2004 to $15.3 million, surpassing the total circulations of both the large private and public chains.


At the end of 2014, the seven largest investment groups owned 362 dailies and 669 nondailies. Almost 90 percent of their 1,031 newspapers were acquired after 2004, their largest transactions occurring between 2010 and 2012.

Investment companies have aggressively sought to expand their newspaper portfolios over the past decade.

Digital First, Civitas, BH Media and 10/13 Communications were all founded during the 2009–2012 period. New Media/GateHouse and Tribune emerged from bankruptcy in 2012 and 2013 and joined the pack in pursuit of more papers. Here’s a graphic presentation of how the companies grew, based on press releases and news accounts.

(For year-by-year details on acquisitions and divestures of the largest investment companies, see Newspaper

Newspapers Acquired, Sold, Merged or Closed: 2004-2016 (7 Largest Companies)


Large newspaper-owning investment entities have financial and corporate profiles distinctly different from the newspaper chains that preceded them. These investment firms are relatively new to owning newspapers and managing them. The newspapers they own are often part of a portfolio of non-newspaper properties, including real estate, retail establishments and financial services.

Perhaps the biggest difference between the new newspaper barons and their predecessors is their pivot away from a long-term commitment to local journalism and the communities their newspapers have historically served toward a short-term investment and management strategy. In annual letters to shareholders, public statements by executives and press releases on their websites, the investment owners clearly acknowledge their laserlike focus on financial return.

For example, Warren Buffett’s 2012 annual letter to shareholders explained that Berkshire Hathaway buys newspapers as attractive investments, given their low purchase cost and their de facto monopoly status in small and mid-sized markets.34 Buffett has also made clear his willingness to shed his firm’s stake in newspapers and move onto other investments as conditions change. In his 2014 shareholder letter, he described Berkshire Hathaway’s readiness to redeploy capital from a declining operation: “At Berkshire, we can — without incurring taxes or much in the way of other costs — move huge sums from businesses that have limited opportunities for incremental investment to other sectors with greater promise. Moreover, we are free of historical biases created by lifelong association with a given industry and are not subject to pressures from colleagues having a vested interest in maintaining the status quo. That’s important: If horses had controlled investment decisions, there would have been no auto industry.”35

As a group, large investment firms that own newspapers share at least five of the following eight characteristics:

  • The stated emphasis of the parent company is to maximize shareholder return on investment. They do not state an equal commitment to journalism and the community. (See /additional-information/ for a sampling of statements made by managers and executives of investment companies.)
  • Many properties were acquired as a group from other media companies through either purchase of entire companies or divisions. Nine of the largest newspaper owners in 2004 were purchased in full or in part by investment firms.
  • Majority financial and/or operational control of the firm is held by a small number of institutional shareholders, such as lenders, private equity firms or investment fund managers. Three are fully owned by private equity partnerships and one by a pension fund. In the three publicly traded companies, lenders or other types of institutional investors hold enough shares to determine the fate of the company.
  • The company was formed or incorporated within the past two decades and is a relative newcomer to newspaper ownership. Five of the seven investment entities were formed in the past decade.
  • The newspaper holdings are part of a portfolio of non-newspaper companies. The diverse business interests of these new newspaper owners include auto dealerships, real estate, financial instruments, distressed retailers, manufacturing firms and pharmaceutical and transportation companies, to name a few.
  • There has been much movement of individual newspapers within portfolios. More than a third of all newspapers changed ownership in the past decade, many of which have been bought and sold two or more times.
  • There have been two or more financial restructurings, including bankruptcy reorganization, a rebranding after selling the company or flips between public and private ownership. Four of the companies have filed for bankruptcy; two have flipped from either public to private or private to public.
  • A private equity company, a hedge fund or pension fund has at some point during the past decade owned all or a significant portion of the enterprise. Four are owned either by a private equity fund, hedge fund or a pension fund. Two of the three publicly traded companies have been owned for at least a year by private equity funds.

Characteristics of Seven Largest Investment Companies as New Media Barons


The American press exercises a freedom guaranteed in the Constitution. Newspapers have almost always been run as for-profit businesses, but with a special civic role in the nation and in their local communities. In turn, the public has an interest in the companies and people who exercise the freedom and power of the news media. It is very difficult to ascertain the intentions of the new newspaper owners. The websites of the newspapers they own invariably proclaim their commitment to public service journalism. Yet the press releases and publicly available material of the investment partnerships that own these newspapers focus on financial return for shareholders.

While UNC researchers were assembling the data in this report on new media barons, The New York Times was independently reporting on the movement by private equity entities into delivering local and state government services.36 The Times report on Fortress Investment Group did not mention that the firm now owns more newspapers — under the New Media/GateHouse brand — than any other chain, but it provided this insight into the sweep of the holdings of major investment entities:

“While little known outside Wall Street, Fortress covers a cross section of American life through companies it owns or manages. It controls the nation’s largest nonbank collector of mortgage payments. It is building one of the country’s few private passenger railroads. It helps oversee a company that manages public golf courses in several states.”

In this context, the rise of new media barons raises questions of accountability and transparency: Who makes decisions on overall strategic direction and content of the newspapers these firms manage? What’s the structure of these newspaper-owning companies?

Publicly traded newspaper companies are required to submit quarterly and annual reports with audited financial statements and management assessments of the business.37 Still, financial statements of the three publicly traded investment companies — New Media/GateHouse, BH Media and Tribune — are difficult to decipher, especially as they relate to the performance of their newspaper properties and their long-term strategy for them.

Private investment companies are required to disclose only the most basic information.38

Here is a summary of relevant financial developments of major newspaper-owning investment firms from what can be ascertained from publicly available information, including company websites and press releases:

New Media/GateHouse (Fortress Investment Group): 379 Newspapers in 2014

In 2005, the private equity firm Fortress Investment Group (FIG) entered the newspaper business by purchasing the Liberty Publishing Group from Leonard Green & Partners, a Los Angeles-based investor. Fortress has $70.5 billion in assets under management and describes itself on the company website as “a leading, highly diversified global investment management firm” that “applies its deep experience and specialized expertise across a range of investment strategies — private equity, credit, liquid markets and traditional asset management — on behalf of over 1,600 institutional investors and private clients worldwide.” In 2006, Fortress took the Liberty Group Publishing public under the GateHouse brand. A year later, Fortress, itself, became the first large private equity company to list its shares on the New York Stock Exchange.

In 2013, after purchasing the Dow Jones Local Media Group through Newcastle Investment, a company owned and managed by Fortress,39 GateHouse filed for reorganization through a pre-packaged bankruptcy. All newspaper properties were transferred into a newly created subsidiary called New Media Investment Group, also publicly traded.40,41 Fortress assumed the majority of the debt and management of New Media, and in return receives stock, stock options and a management fee of 1.5 percent based on the value of the stock. Some of the largest shareholders in New Media include Vanguard, T. Rowe Price and BlackRock.42 Since emerging from bankruptcy, Fortress, under the New Media/GateHouse brand, has continued to expand and has pledged to fund $1 billion in acquisitions through 2016.43 Today, New Media has a market capitalization of about $640 million, accounting for less than 1 percent of Fortress’ $70.5 billion in assets.

Digital First Media: 208 Newspapers in 2014

Alden Global Capital, a privately owned hedge fund operator, founded Digital First Media in 2011 as a subsidiary that included newspapers in the MediaNews Group and Journal Register Co. Alden had assumed ownership of the MediaNews Group in 2010 and Journal Register in 2011 through bankruptcy proceedings. The Journal Register, which was the third-largest newspaper company in 2004 with 151 papers, had sold off more than half of its papers by the time Alden Capital assumed ownership. MediaNews and Journal Register were formally merged in 2013. Alden has also purchased outstanding debt from a number of private newspaper owners, including Freedom Communications. Digital First acquired The Orange County Register, owned by Freedom Communications, in bankruptcy proceedings in 2016.

Because Alden is privately held, there is little available information on the finances of the company or its owner/founder, Randall Smith.44 In 2014, Alden announced its intention to sell Digital First Media. Two private equity groups — Cerberus Capital Management and Apollo Global Management — expressed interest in purchasing the company, but the deal for the entire company never materialized.45 Since then, Digital First Media has acquired Freedom Communications, while also quietly disposing of some properties. Recently, it has sold The Salt Lake (Utah) Tribune to Paul Huntsman, brother of former Gov. Jon Huntsman Jr., as well as its small papers in southern Vermont and northwestern Massachusetts to a group of local businessmen.

Community Newspaper Holdings (CNHI): 128 Newspapers in 2014

CNHI was created in 1997 as a holding company for the Retirement Systems of Alabama to purchase newspapers. The Alabama retirement enterprise manages 23 investment funds. The income from CNHI makes up such a small portion of the diversified $36.6 billion investment portfolio that it is not broken out in annual reports. Since 2004, the company has made only small acquisitions, usually purchasing independently owned and operated papers in small markets. During the same period, it has sold or closed more than three dozen of its underperforming newspapers.

Civitas Media: 98 Newspapers in 2014

Versa Capital Management, a private equity firm based in Philadelphia, formed Civitas Media in 201246 when it combined four media subsidiaries the company had bought in bankruptcy or financial distress. Those four were Freedom Central, a division of Freedom Communications; Heartland Publications; Impressions Media, and Ohio Community Media (Brown Publishing). Since forming Civitas Media, the firm has not made any major acquisitions. As of 2015, Versa had $1.4 billion47 in assets under management, including ownership of retailers, restaurants and manufacturers. According to its website, Versa Capital focuses on buying “distressed properties.”48 The company’s target criteria for acquisitions include “Chapter 11 or Out-of-Court Restructurings” and “Reorganizations & Liquidations.”49

tronc/Tribune Publishing: 95 Newspapers in 2014

In 2007, the publicly traded media company, which included radio and television stations, as well the Los Angeles Times and Chicago Tribune, was purchased for $8.2 billion by investor Sam Zell, who then took the company private, financed primarily with debt.50 Zell is founder and chairman of a private investment firm, Equity Group Investments, which has a diverse portfolio of assets, including real estate, energy, transportation and retail. The Tribune Co. filed for Chapter 11 bankruptcy in 2008, listing $7.6 billion in assets against a debt of $13 billion.51 In 2012, the company emerged from bankruptcy under the control of its institutional creditors, including JPMorgan Chase & Co., Oaktree Capital Management LP and Angelo, Gordon & Co. In 2014, the Tribune newspapers were spun off from the broadcasting assets with $350 million in debt, and the restructured company began trading again on the New York Stock Exchange as Tribune Publishing. The publishing company made its first acquisition in 2014, buying the suburban newspaper group of the Chicago Sun-Times. In 2016, Michael Ferro, owner of the Chicago Sun- Times, began accumulating shares of Tribune Publishing through his private equity firm, Merrick Ventures LLC, after donating his shares of the Chicago Sun-Times to an unnamed charitable trust to alleviate concerns about a conflict of interest.52 Since becoming CEO and publisher, Ferro has brought in health tech investor Nant Capital, managed by Patrick Soon-Shiong, part-owner of the Los Angeles Lakers. The two investment firms owned 27 percent of the stock of tronc at the end of June 2016 and have the ability to purchase up to 50 percent of the shares.53

BH Media: 76 Newspapers in 2014

Berkshire Hathaway, the international conglomerate and holding company founded by Warren Buffett, has a market capitalization of $368 billion.54 It owns a diverse portfolio, including insurance, clothing, manufacturing and retail. BH Media was formed as a newspaper subsidiary in 2011 after Berkshire Hathaway purchased the Omaha World-Herald in Buffett’s Nebraska hometown. In 2012, BH Media bought Media General’s newspapers.55 Since then, BH Media has expanded through acquisitions of smaller newspapers. Revenues from BH Media account for less than 1 percent of total Berkshire Hathaway revenues.56

In contrast to investment fund managers who are relative newcomers to the newspaper industry, Buffett’s experience dates back to the mid-1970s, when he purchased The Buffalo News and was appointed to the board of directors of The Washington Post Co., a position he held for more than two decades.

In his 2012 annual shareholder letter, Buffett devoted an entire section to explaining his rationale in purchasing Media General. With earnings multiples, which determine purchase price, at historic lows, local newspapers, he said, were especially attractive acquisitions, and with a “sensible” digital strategy, they should be viable for years to come. But he also said that BH Media was willing to shutter any newspaper operating at a loss, citing the closing in 2012 of the Manassas News & Messenger, a 10,000-circulation daily in Virginia. In 2016, Buffett stressed that all his papers are profitable, “but the trend lines are discouraging.” With the exception of national papers, he said, “no one has cracked the code” to developing a sustainable business model.57

10/13 Communications: 47 Newspapers in 2014

This private investment firm, formed in 2009, is a partnership between 10K Investments, owned by two Reno, Nevada, businessmen, and 13th Street Media, owned by Randy Miller, who previously owned the Boulder (CO) Daily Camera before selling it to E.W. Scripps in 2005. 10K investor Arne Hoel has served on the boards of Swift Communications, which owns small newspapers in Colorado and California, and American Consolidated Media, which sold its 100 newspapers to Adams Publishing Group and New Media/GateHouse. Hoel’s partner, Brett Coleman, sold a residential construction company in 2005 and has no previous newspaper experience. Since its formation, 10/13 Communications has made three major acquisitions: Freedom Communications’ Phoenix assets, the Dallas operations of American Community Newspapers and ASP Westward’s Houston newspapers. The company also bought the ITZ Group, a digital consulting company, in 2013.


Since 2014, the big chains have grown even bigger. Some legacy companies have re-entered the market and begun bidding against the investment groups. Most notably, in 2016, Gannett made two major purchases — Scripps/Journal Media and North Jersey Media. Meanwhile, New Media/GateHouse, Digital First and BH Media have continued to acquire newspapers and newspaper chains. The acquisition sprees of the largest companies have begun to raise questions. Among them: How big is too big? Are the measurements used to determine “monopoly” in a local market still valid in a digital era? What are the responsibilities of the owners of these large chains of newspapers to the communities where these papers are located?

As of mid-2016, the three largest newspaper chains — New Media, Gannett and Digital First — own 898 newspapers, nearly twice as many as the three largest chains in 2004. They control a combined 12.7 million in circulation.

  • New Media/GateHouse owns 432 papers in 32 states and controls 3.6 million in circulation.
  • Gannett currently owns 258 papers in 34 states and has 5.2 million in circulation. In recent months, Gannett has made two unsolicited attempts to buy tronc/Tribune. If brought to fruition, such an acquisition would add 104 newspapers with 3.4 million in circulation to Gannett’s portfolio.
  • Digital First owns 208 papers in 15 states and has 3.9 million in circulation.

Here are the major purchases made by the three largest companies:

  • New Media/GateHouse purchased 39 local papers in 2015 for $102.5 million from the privately held company, Stephens Media.58
  • Gannett, after spinning off its broadcast properties in 2015 into a separate company called Tegna, emerged debt-free and immediately began buying newspapers again.59 It has purchased 20 papers from the Journal Media group60 and 11 papers in Texas that had been jointly owned with Digital First.61 Most recently it purchased 46 newspapers from the North Jersey Media Group.62
  • Digital First added 22 papers that had previously been part of Freedom Communications,63 but also shed 18, including the Salt Lake Tribune64 and several smaller papers in New England. In addition, it merged several papers.65

Tribune Publishing, renamed tronc in 2016, is now the sixth-largest chain, in terms of number of papers, up from seventh place in 2014. It bought the San Diego Union-Tribune and its accompanying community newspapers for $85 million.66 It also rejected two bids by Gannett to purchase the company at 5.5 times annual earnings.67

The Largest 25 Companies Ranked by Number of Papers Owned: 2016

Two privately held newspapers companies — Adams Publishing Group and Boone Newspapers — were also active purchasers of small-market papers in 2015. Adams Publishing Group, a family investment fund formed in 2014 to buy and operate small newspaper chains in Ohio, purchased 24 community papers from Nash Holdings, which also owns The Washington Post.68 Adams now holds 52 papers. Boone Newspapers, which prefers to buy family- owned papers or small chains, purchased nine more papers and now owns 61 papers.

If Gannett succeeds in acquiring tronc/Tribune, it will own 362 papers in 36 states and control 8.6 million in circulation — more than six times the circulation of the Wall Street Journal and more than twice the circulation of all the 432 papers owned by New Media/GateHouse.

The largest newspaper companies are larger than ever before. Until recently, however, the government had expressed little concern about the merger and acquisition activity. Then, early in 2016, the Department of Justice sued to stop Tribune Publishing from purchasing Freedom Communications, citing antitrust concerns. Tribune would have a dominant market share in southern California if it owned the two Freedom papers — the Orange County Register and Riverside Press-Enterprise — as well as the San Diego Union-Tribune and the Los Angeles Times.69

Digital First Media, which had submitted a lower bid than Tribune, then purchased Freedom Communications for $52.3 million from local owner Aaron Kushner, who had filed for bankruptcy.

Consolidation usually occurs in a mature industry dealing with declining revenues and profit margins. The remaining firms attempt to achieve economies of scale with both costs and revenues. The large chains — including many of the legacy newspaper owners — assume that they need to own many papers in many regions to attract advertising and to hold down costs. This raises the question: Is consolidation the only answer, and will it pay the bills much longer if the industry does not develop new business models?

It is difficult to predict if the fevered pace of the past decade will continue. Or if the new media barons — the large investment entities — will continue to be the dominant buyers and operators. They may choose to divest their newspaper holdings and move on to other more attractive options.

The massive consolidation and reshuffling of ownership since 2004 has both short-term and long-term ramifications for communities that have historically depended on their newspapers to provide them with the news and information that strengthens democracy and capitalism at the local level. The larger the chains become, the more detached and disconnected newspaper owners become from the communities their newspapers have historically served. The next section, “The Emerging Threat of News Deserts,” considers what is at stake for both the industry and communities across the country.


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