Press Herald for sale?

By JEFF INGLIS  |  August 24, 2006

Even if they win the JOA case, if the Blethens suddenly unveil hidden riches, they will only be inviting another legal battle over allegations they misled everyone in the dispute. And if they lose, with no land left to sell to raise money and limited prospects for improving newspaper revenue, their options will be limited.
One of those options — indeed, one of the best — is to sell a newspaper or a group of papers. Frank Blethen has repeatedly said he would not sell the Seattle Times or the Maine newspapers, citing family connections to the two regions.

The family can’t — or won’t — sell the Times, mainly because Hearst has a right-of-first-refusal agreement to buy it if the paper ever goes on the block. Frank in particular has spent years of time and gallons of ink badmouthing big-corporation ownership of media companies. (And in 2001, the family turned down a buyout offer of $750 million from Knight Ridder, including assuming $250 million in company debt. The family must have known it was the best offer they would see for many years to come.)

The Blethens’ reputation in Seattle is in part based in its opposition to companies such as Hearst. The family “literally think that everybody is out to crush them and their legacy of family ownership,” says Elizabethe Brown, administrative officer of the Pacific Northwest Newspaper Guild, which represents employees at both Seattle dailies. To sell their flagship newspaper to the company they have accused for years of being an “absentee owner” would be a dramatic reversal of course
He could sell some of the smaller papers in Washington, but if he’s keeping the Times, it would certainly be useful to have some regional partners with which to share news and advertising.

What’s left are the papers in Maine, to which the family has sentimental (and thin historical) ties. The Blethen family is well ensconced in the Seattle area; it seems unlikely they would all uproot and move east, though one of the rumors in Seattle is that “Maine is the exit strategy,” according to Brown.

The family has been reducing its presence in Maine of late. The only Blethen family member still working in Maine is Robert Blethen Jr., a member of the “fifth generation” who works in circulation at the Press Herald. (There are other members of the family on the board of directors of Blethen Maine Newspapers, but they are required to come to Maine only once a year, for the company’s annual meeting.)

What then?
Though it would be hard to recoup the $200 million purchase price of the Maine papers, some estimates peg the McClatchy stake in the Seattle Times Company at $300 million, and one analyst has estimated McClatchy paid $150 million for that share, based on accepted formulas for calculating the purchase price of a newspaper asset.

If McClatchy sold its 49.5-percent share of the Seattle Times Company to the Blethens in exchange for the family’s Maine dailies, the Blethens would win on two counts. Not only would they have disentangled themselves from the Maine papers’ union fights and uncertain financial futures, but they would also fulfill a longstanding plan regarding the Seattle paper — namely, to be its sole owner. In March, the Press Herald reported, Blethen executive Chuck Cochrane said in a memo to that company’s Maine employees, “The Blethen Family is committed to retaining its majority ownership of the Seattle Times Company . . . and, if the opportunity ever presented itself, to acquire the minority interest.”

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