Portland Press Herald from Portland, Maine • 5

Portland Pins llcnild Wednesday April 1 1998 7A ON I I AGE IE GUY GANNETT COMMUNICATIONS OR SALE News generates concerns over civic loss Local leaders hope any new owner will retain the sense of community leadership By DEAN LUNT Staff Writer Politicians business people and employees mourned the prospective sale of Guy Gannett Communica tions Tuesday as the loss of a powerful family owned institution ihe loss of another Maine based company and the potential loss of community leadership Observers said they hope new owners will contribute as much to Portland and the state as did the descendents of Guy Gannett a man who started a media empire in 1921 when he purchased the Water ville Morning Sentinel and began publishing the Portland Press Ilerald The decision to sell the company was made by Madeleine Corson granddaughter and John II Gannett son the standpoint we have always felt support and leadership both from Maddy and from the whole Guy Gannett opera said Deb Cook acting presi dent of the Chamber of Commerce of the Greater Portland Region will certainly be a loss if that sense of Meg Weston to "By President of Hie Portland Newspajicrs community involvement doesn't continue I would hope a new owner would appreciate the value of an organization that holds itself up in the community as a leader and a Similar sentiments were echoed by Sen Olympia Snowe current owners Madeleine Gannett Corson and her family deserve our thanks for years of leadership in the community and I wish them all the best in the years Snowe said hope that a new owner will match the steward ship and civic commitment demon Jeannine A Guttman Editor looks ahead has hopes for future i A JhnB strated by Guy Gannett Communications That civic commitment began in the 1920s and grew as Gannett built largest media company which at one time included three newspapers a radio station and a television station in Portland owned three of the most important newspapers in the said Herbert Adams a member of the Portland School Committee and a local historian he used vigorously to help shape public policy in the state of Maine whether in the battles against the Klan in the 45 Jr 1 Jrji Sen Olympia Snowe Thanks family for years of leadership 20s the battles over who owned the right to the Maine rivers or the public power battles" sorry to see another Maine owned family owned business said Sen Susan Collins sure this was a difficult decision for Maddy for whom always had the highest regard I know she and her team have let the needs and concerns of their viewers and readers guide them in serving their Stanley Bennett president and chief executive of Oakhurst Dairy said are certainly saddened to it a 31 Ki jOWl Sen Susan Collins Mourns loss oj another Maine company see any family enterprise sold here in southern Maine especially one as important to the Maine community as Guy said Bennett the third generation of his family to run Oakhurst Corson is a great lady and 1 am sure what she has decided to do is in the best interests of the business for the longer term but it is still In the newsroom at The Portland Newspapers the decision to sell was announced shortly after 3 pm by Jeannine A Guttman editor and vice president and Curt Hazlett managing editor it is the end of an era because the family ownership of the newspaper will be said Guttman has left a wonderful legacy in terms of the journalism wc do here When I look ahead even though this is stunning and takes your breath away a little bit the future can be even more or longtime employees the end of Gannett ownership was viewed with sadness because many felt a connection to the family is unsettling and the longer you have been here the more unsettling it is because there has always been a strong corporate presence here You can feel it every said Bill Nemitz a columnist for The Port land Newspapers and an employee of Guy Gannett companies since 1977 is strange to spend your entire career working for an entity and then in the course of an after noon learn that soon tha( entity will not exist But despite the family legacy there are no heirs interested in continuing the tradition so the job fell to Corson and John Gannett to put a for sale sign on the company must be a heartbreak to said Adams the historian: know how much the family tradition meant to her how much the family legacy meant to Maine and I know how seriously she took her heritage and its NEWSPAPERS INTERACTIVE MEDIA Madeleine Corson James Shaffer DIRECT MARKETING Publisher and chairman oj the hoard President und chief exec nine offun Guy Gannett Direct Penland Sen Susan Collins jS' CORPORATION HOLDINGS owns the Boston Globe The Tri bune Co which publishes the Chi: cago Tribune Hollinger Inc a Can adian based chain and the Times Mirror Co owner of the Los Angeles Times Another potential buyer is Gan nett Co which is not related to Guy Gannett Communications Gannett owns nearly 100 newspapers including USA Today and a score of television stations A Gannett Co purchase would be complicated by the company's ownership of WCSEI TV which it bought last year ederal regulations prohibit ownership of tclexision stations and newspapers in the same market but Morton said Gannett Co could easily solve that problem they had a chance to get the new spaper they would spin off (sell New Media Development Group Portland 2 3 employee Voice Information Senices Portland 3 employees KO7 Inc (minority imereti Durham NC Portland Press lieraid and Maine Sunday Telegram Portland 600 employees Kennebec Journal Augusta 105 employees Maine Morning Sentinel Waterville 85 employees Coastal Journal Bath 11 employees W1CD TV Champaign III 59 WOKR IV Rot lies tvr 1 2 3 employees WTWC TV Tallahassee I la no and financially vulnerable if a recession hit A public sale of stock was also ruled out' Shaffer said because of the company's relatively small sueand the likelihood it would become for a bigger and possibly unwelcome buyer Corson said she wants to be careful in selecting the new owner She said she hopes a buyer would agree to continue' the company efforts to encourage teamwork and collaboration By selling now she said the company has greater free dom to decide which suitor ould be the best match hate to see it go but we know the right thing to do" she said Gannett said he also regretted the decision to sell but agreed with Corson that it was the best course for the company Gannett said he had little To add to what Corson said the story" he concluded Corson has said for years that the company was not for sale but that changed this year after she appointed a board committee in December to look into options for the company had no idea we would have to Corson said noting that the company has done similar studies in Madeleine Corson publisher The announcement Shaffer said will the headline I hoped never have to Shaffer began to read a statement to managers during an afternoon meeting but had to stop after just one line Another executive took over from an emotional Shaffer who was named the top offi cial in 1991 Margaret Weston who was named president of The Portland Newspapers just last year said the decision caught her off guard as well comes as a surprise to me but I can understand the market timing is right for this decision weston said Staff photo bv (ordott hibnrski NewsChannel 13 newscasters from left Dave Santoro Kim Block Doug Rafferty and Dave Eid finish the 6 pm newscast Tuesday after announcing that the Portland television station's parent company Guy Gannett Communications plans to sell the family owned corporation Publisher Madeleine Corson said she expects the company which also owns The Portland Newspapers to be sold by the end of the year 66 sony to sec another Maine ouned family owned business sold 55 You hate to see it go but hc know the light thing to do99 None of the analysts contacted Tuesday would offer a projection on the value of Guy Gannett Communi seven television stations However a half dozen stations in similar markets along with seven radio stations were purchased ear lier this year for $255 million by Sinclair Broadcast Group of Baltimore John Morton who writes a column on the business of journal ism for the American Journalism Review said 162 daily newspapers changed hands last year Those transactions had a total value in excess of $6 billion has been a great deal of acquisition activity over the past couple of said Morton who also runs an investment research company Morton said difficult to put a value on the Guy Gannett Commu nications but he said the Maine newspapers alone would probably be worth $170 million or more Newspapers generally sell at 11 to 15 times earnings Morton said Although Guy Gannett Communica tions is a privately held company and does not have to disclose finan cial information the company has told employees that earnings fast year were about $143 million from its Maine newspaper operations That would put the value of the newspapers between $157 million and $214 million Guy Gannett Communications has more than 1400 employees In addition to the three daily and one weekly newspaper in Maine the company owns seven television sta tions including WGME TV in Portland from Maine to Illinois and south to lorida New Media Development Group which pro duces editorial and commercial on line material a phone information service a direct marketing com pany and a stake in a software development company Corson and James Shaffer Guy Gannett pre sident and chief executive officer said there are no offers currently on the table for the company although they have been approached in recent years by would be buyers They anticipate strong interest in the holdings and a quick response by potential buyers Shaffer said the company should be able to narrow the field to several possible buyers by early summer and then close a deal by the end of the year The announcement came as a shock to employees Even Shaffer said he learned only last week of the decision by Corson and her uncle John Gannett to sell the company the TV station in a he said Shaffer said Guy Gannett Com munications will entertain offers for 1 all its holdings or for individual units As it is the cross ownership rules would prohibit a new owner from keeping both The Portland Newspapers and WGME TV Guy Gannett ownership of the papers and the television station is legal because it pre dated the federal regulations Karl Choi an analyst for Merrill Lynch said he expects the televi sion stations and newspapers to attract separate buyers Shaffer said he anticipates most oi the company's corporate level jobs to be eliminated by a new owner but lower level jobs would probably not be affected He also said he investigated other sales options including an employee stock ownership plan or a management led buyout Both of those approaches he said would leave the company highly in debt TELEVISION STATIONS WGME TV Poiilind 115 employees WGGB 1V Springfield Miss 104 employees KGAN TV Cedar Rapids km a 101 employees WICS TV Springfield Ill 89 661 rom the 1 standpoint we have always felt support and leadership both from Maddy and from the whole Guv Gannett operation It will ret tainly be a loss if that sense of cominunirv invohement doesn't continue 1 would hope a new owner would appreciate the value oj an organization that holds itself up in the uoninuinity as a leader ami a pat tieipant55 Deb Cook acting president Chamber of Commerce of the Greater Portland Region 66lt must be a heartbreak to (Madeleine Corson) I know lion much the family tradition meant to her how much thcfaniilv legacy meant to Maine ami 1 hiioiv iiow senously she took her heritage and its iesjxmsibilities9? Herbert Adams local historian television group and obviously the Portland paper would be an attrac tive acquisition The company has hired the New York investment banking company Lazard reres Co to market its holdings Some of those likely to bid on the company Drewry said include the the past and concluded that it would New York Times Co which also be best to hold onto the company She said none of the 13 family members in line to inherit Guy Gannett is interested in running the company If she and John Gannett did not sell before their deaths Corson said the trust they oversee would dis solve and a decision on the future of the company would be forced on the 13 cousins would have been fighting and horrible and someone ould write a book about she told the com managers Tuesday afternoon William Drewry an analyst with Paine Webber said he thought the company would not have trouble finding a suitable buyer think there's going to be a feeding frenzy for he said "but the 66It comes as a suqn isc to me hut 1 can understand die market timing is right for this decision 99 Meg Weston president GANNETT Con tin tied 1A wANNeI Lax LIWBTi TWJ 'W I I ilfc fa BWaaL scHBIkl A A jv Wwjr QUOTABLE CORPORATION HOLDINGS.