The sale of a major Western publisher closed Monday but uncertainty still looms over more than 150 newspapers it operates in the U.S. and Canada.
Black Press announced in January that it was effectively bankrupt and being acquired by its lenders, a pair of Canadian investment firms.
The firms were joined in the deal by Carpenter Media Group, a Southern newspaper chain spun out of Alabama publisher Boone Newsmedia last October.
There’s a sad history of investment firms buying and then bleeding out local newspapers but this group deserves a chance to do the right thing.
To me, that means not just keeping the lights on until financiers are made whole. It also means finding ways to reinvest in papers that were thinned during the pandemic and as Black Press struggled to cover its debts.
“I’m just glad it’s given our companies some stability to keep doing local journalism,” said Andy Hobbs, editorial director of its King County publications.
After years of running lean, there’s not a lot more that can be cut at Black Press newspapers. It publishes 43 in Washington state through its Sound Publishing subsidiary, including dailies in Aberdeen, Everett and Port Angeles and clusters of weeklies in Clallam, Island, King, Kitsap and San Juan counties.
Surrey, B.C.-based Black Press also publishes the Honolulu Star-Advertiser, three papers in Alaska and dozens of papers in western Canada.
Some of the portfolio could be spun off eventually though recent sale attempts failed to attract a buyer other than the financiers, Canso Investment Counsel and Deans Knight Capital Management.
Carpenter Chairman Todd Carpenter, who visited Puget Sound-area publications last month, pledged in the announcement to support their journalism.
“Canso, Deans Knight and Carpenter resolutely support the vital role that effective journalists, newspapers and digital news organizations play in thriving communities, and we are committed to ensuring our publications continue to play that essential part in the communities we serve,” he said in a release.
Federal support enabled the deal.
Bankruptcy protections in Canada and the U.S. allowed the financiers to acquire and continue operating the company, instead of liquidating it to pay creditors.
Canada’s government also made several moves last year that incentivize the preservation and acquisition of newspapers. It increased a payroll tax credit for newsroom jobs and implemented a policy requiring tech giants profiting from news content to compensate publishers.
The U.S. Pension Benefit Guarantee Corporation also agreed on Feb. 15 to let Black Press pay just $2 million to clear a $47 million pension liability, left over from its disastrous acquisition of the Akron Beacon-Journal in 2006.
Black Press paid $165 million for the Ohio paper and sold it for $16 million in 2018 but was still liable for the pension. The PBGC took responsibility for the pension in 2021 and was unable to reach a settlement with Black Press until the February deal.
Black Press recorded a $57.6 million loss in its last fiscal year, on sales of $243 million. It owed around $61 million. It employs about 1,200 people.
Under the reorganization plan, the company “intends to retain
substantially all of the employees,” according to a March 5 report by the Canadian monitor overseeing the reorganization and sale.
We’ll see how that plays out and whether the new owners use their financial heft to strengthen the business through further investments.
Al Cross, a University of Kentucky journalism professor and director emeritus at the Institute for Rural Journalism, provided a mixed review of Carpenter and Boone newspapers he’s followed.
Cross said his observations suggest “that they are trying hard to provide good journalism but have been unwilling or unable to staff up to the level at which that will be accomplished.”
Carpenter’s daily in Bowling Green is “still getting the basics done” but Cross has heard from people in the community that it “declined markedly since the local family sold it.”
Cross said it would be good to know what incentives the deal has for good journalism.
I’ll ask if I get a chance. So far executives at Sound Publishing, Black Press and Carpenter Media all declined to be interviewed about what’s happening.
Australia update: A group of news publishers is urging the Australian government to consider a “must carry” law to prevent Meta from blocking news on its platforms in the country, the Financial Review reports.
The Facebook parent company is refusing to renew content agreements made under Australia’s 2021 media bargaining code, which forces dominant tech platforms to negotiate content deals with news publishers.
A “must carry” provision was considered as part of the 2021 law but not included. Now it may be time to add that to the toolbox for getting online gatekeepers to fairly compensate news outlets.
“Meta must not be allowed to publish unsubstantiated facts as news without also offering the community access to verifiable, public interest journalism at a bare minimum,” the Public Interest Publishers Alliance said in a statement, per the report.
This is excerpted from the free, weekly Voices for a Free Press newsletter. Sign up to receive it at the Save the Free Press website, st.news/SavetheFreePress.
The opinions expressed in reader comments are those of the author only and do not reflect the opinions of The Seattle Times.