Digital First Media, the owner of the St. Paul Pioneer Press, apparently has decided to hold onto its newspaper business.
Newspaper watcher Jim Romenesko, himself a Pioneer Press alumnus, reports that CEO John Paton has sent a memo to employees that a sale “is not in the best interest of shareholders at this time.”
You will recall that back in September, DFM announced a strategic review process – meaning we would look at all of our options for the future, including potentially the sale of DFM as a whole or in regional clusters, or the continued execution of our business plan.
While the review process is not complete it has been determined that a sale of the Company as previously speculated is not in the best interest of shareholders at this time.
However, we continue to have discussions concerning selected assets, and we are looking at potential acquisition opportunities.
Our performance is driving our digital future and increased profitability, and our essentially debt-free structure has given us a lot of options, which we will continue to explore. We will keep you updated on our plans, including when the strategic review process has concluded.
Is this good news for locals? Last September the union there took out a full page ad in the Star Tribune begging Digital First to unload their paper.
Meanwhile, in an article today, newspaper watcher Ken Doctor reported that “razor-thin” profits are stifling newspapers’ ability to innovate. He seemed to hint that the potential buyer of Digital First Media had some hesitation.
You may wonder what’s happened to the Apollo Global Management acquisition of Digital First Media (“What are they thinking? Apollo’s acquisition of Digital First Media”), which we thought would be done by now. I’ve gotten many queries on it; the Apollo/DFM haggling continues.
Let’s recall this is a deal of the head, not the heart, for both the seller and the buyer. And the buying heads — known for their private-equity financial wizardry — aren’t quite sure about the important numbers.
DFM faces the same sort of print ad losses and financial stresses as its peers. Has DFM chief operating officer Steve Rossi really been able to enforce continued cost-cutting to match his company’s loss of revenue and maintain profits?
That’s just one of the questions Apollo wants to understand as it delves deeper into DFM accountancy, which some in the industry believe harder to decipher than the average.
Even with these uncertainties, consider the Apollo buy still more likely to finalize than not.
Doctor said one solution facing many papers is eliminating daily publishing.