After 74 years under the control of the Gannett family, the Portland Press Herald entered a new era in 1998, when it was put up for sale by the family trust that managed them.
The 14-year period since then has seen three separate owners of the Press Herald and the other newspapers that now make up MaineToday Media. Each owner has faced a rapidly shifting industry, and has worked to shore up falling circulation and advertising revenue while trying to capitialize on the Internet.
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The 1998 sale split up the Guy Gannett Communications media empire. Most of the company’s seven television stations, including WGME-TV in Maine, were sold to Sinclair Broadcast Group for a reported $310 million. After entertaining offers from a few large newspaper companies, Gannett’s managers sold the papers to The Seattle Times Co., which at the time operated only in Washington state.
The company took over publication of the Portland Press Herald, Maine Sunday Telegram, Kennebec Journal in Augusta, Morning Sentinel in Waterville, Coastal Journal in Bath, and several websites.
The new owner – a private, family-owned company that ran the largest locally operated metropolitan newspaper in the country – shared similar journalism values and deep Maine roots. Publisher Frank Blethen had been coming to Maine to reconnect with his ancestors, visiting the home of his great-grandfather, who had moved west in 1896 to buy a newspaper in Seattle.
The Blethen Maine Newspapers, as he named the company, set out to advance the newspaper traditions of the Gannett family. It seemed like a perfect, long-term fit. But debt from the $230 million purchase and a sputtering economy threatened the future of The Seattle Times. To save his family’s core business, Blethen reluctantly put the Maine properties on the market in 2008.
The next year was a dark time for the newspapers, marked by job cuts and reduced contents of the publications, as the company struggled to remain solvent.
Fifteen months later, the media company was sold again, for an undisclosed price believed to be a fraction of what Blethen had paid.
The buyer, in July 2009, was called MaineToday Media Inc. The investment group was headed by Bangor native and veteran publisher Richard Connor, and backed by a private equity firm from Dallas, HM Capital Partners LLC. At the time, Connor also was publisher of the Times Leader in Wilkes-Barre, Pa.
Connor took steps to recapitalize the newspaper and pay back loans, in part by selling assets and consolidating operations. Within days, the Press Herald’s downtown office building and former printing plant on Congress Street were sold to a developer. Printing of the Kennebec Journal and the Morning Sentinel was later moved to the Press Herald’s press building in South Portland, and the Augusta and Waterville properties were put up for sale.
By mid-2010, much of the Press Herald office staff had been relocated in a new, leased headquarters, at One City Center, where it remains today. Print circulation had stopped declining, overall ad revenue had stabilized and, on an annual basis, the newspapers were profitable, Connor said at the time. Websites were revamped, part of an ongoing effort to transition from a newspaper company to a multimedia content provider.
But the revival – and Connor’s involvement – were short-lived.
The lingering economic downturn and mounting financial problems last year left MaineToday Media insolvent and negotiating with creditors. Connor cut dozens of jobs and accepted buyouts to reduce costs. Just over a year ago, Connor, too, was gone, following undisclosed conflicts with the company’s board of directors. HM Capital then put the struggling business up for sale.
Last January, a group of investors that included media executive Chris Harte, a former Press Herald president, signed a letter of intent to become the majority owner of MaineToday Media. But the group was unable to come to final terms with management and didn’t win the support of workers represented by The Portland Newspaper Guild, which are partial owners under an employee stock ownership program.
With the business at risk of closing, the Guild appealed for help in January from S. Donald Sussman, a wealthy financier and North Haven resident who had expressed interest in the of the newspapers.
Last February, MaineToday Media announced that Sussman would provide a $3.3 million loan and would own a 5 percent equity share in the company and have a seat on the board of directors. In March, at the insistence of institutional investors, Sussman’s loan was converted to a straight purchase of private stock, giving him a 75 percent ownership stake.
Sussman, who is married to U.S. Rep. Chellie Pingree, D-Maine, is one of the state’s leading philanthropists and political donors. His support of liberal and Democratic causes has put Sussman, and his financial control of MaineToday Media, under fire from Republicans and conservative activists, who charge that he is influencing the newspaper’s editorial policies and coverage.
Sussman has maintained from the start, however, that he won’t interfere with daily news operations. His goal, he said, is to maintain a robust, local newspaper in Portland. He said he viewed the purchase as more of a civic venture than a financial investment.
Since then, the newspaper has begun growing again, through investments.
Local news coverage and public service journalism have been reinvigorated, with the hiring of nine reporters and a two editors. Expanded political reporting has ramped up during the election season.
A customer service call center that had been located in Central America has been brought back to the United States. Advanced circulation software systems are being installed, which will simplify communications with subscribers and improve targeting customers for advertisers. Later this fall, the newspaper will relauch its online lifestyle portal, MaineToday.com.
Staff Writer Tux Turkel can be contacted at 791-6462 or at:
tturkel@pressherald.com
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