The word out of Maine is that the Seattle Times Co. may be close to closing a deal to sell the struggling Blethen Maine Newspapers chain. Al Diamon, Maine's most widely-read media critic, whose Media Mutt blog runs on the DownEast.com Web site, reports that "two informed sources in the newspaper industry" say Maine Media Investments, the company headed by Pennsylvania publisher Richard Connor, could wrap up a purchase as soon as the end of the month. The Times Co. has been seeking to sell the money-losing Maine chain since March.
A Blethen Maine sale would add a substantial slug of cash to the Times Co.'s scramble to pay down bank debt and avoid what it has called "dire" consequences from a default. At the urging of the majority owners, the Seattle-area Blethen family, the Times Co. borrowed $230 million a decade ago to buy Blethen Maine. Last August, Chuck Cochrane, a senior Times Co. vice president who heads Blethen Maine, warned in a federal court affidavit that default on the company's current bank debt could lead to a shutdown of the Maine dailies in Portland, the state's largest city, and Augusta, the state capital.
The Times Co. has also put two parcels of land up for sale in Seattle's South Lake Union neighborhood to whittle down debt. In addition to The Seattle Times, in Washington company owns the Yakima Herald-Republic, the Walla Walla Union-Bulletin, several Web sites including NWsource.com, Rotary Offset Press in Kent, Wash., and an additional five acres of downtown real estate. Late last month, Steven Wood, who has been handling the South Lake Union sale, told Crosscut the company had a buyer willing to pay more than the parcels' $32 million total assessed valuation. Wood said the deal would be done by Oct. 1 and the sale would likely be announced in early December.
Of course, plenty has happened in the real estate and financial world since then. Wood did not respond immediately to Crosscut's request for comment. Newspaper broker Dirks, Van Essen & Murray, which is heading the effort to sell Blethen Maine, also declined to comment. The Santa Fe, N.M., broker sold just eight daily papers in the first half of this year, down from 91 in 2007. Owen Van Essen told Crosscut the company expects to announce some additional sales soon, but he would not say whether the Blethen Maine chain would be included.
Times Co. spokeswoman Jill Mackie said the company would have no comment on any rumor of a sale of the Maine chain.
Just how much the Seattle Times Co. would get from the sale of the Maine chain isn't clear. The chain includes the Portland Press Herald and Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville, MaineToday.com, and several real estate parcels. Like Washington, Maine has been hammered by the recent economic collapse and the newspaper chain's primary value is its real estate — assessed at just under $30 million, according to Portland Newspaper Guild officials who are negotiating with Maine Media Investments. According to Media Mutt, the Connor group plans a quick sale of the chain's real estate holdings.
The Seattle Times Co., which is privately held by the Blethen family and a minority owner, McClatchy, does not disclose the size of its debt or other internal finances.
Meanwhile, Times Co. officials in Seattle are privately warning that the cratering economy, and especially the newspaper industry's economic woes, mean more deep spending cuts and that layoffs are coming at The Seattle Times. The paper has already cut nearly 200 jobs in the past year and taken major steps to cut costs, including shrinking the paper's size and consolidating sections of the print edition. But Times managers have told some Pacific Northwest Newspaper Guild members to expect additional layoffs in January. The Times has also told the union, which is in contract negotiations with both the Times and the Seattle Post-Intelligencer, that the company's flagship paper is planning to make its deepest budget cuts in years.
Liz Brown, the Guild's administrative officer in Seattle, said the Times is required to give the union four weeks notice before sending any layoff notices. Mackie, the Times Co. spokeswoman, said the company has been "dealing with the structural issues that have affected newspapers nationally."
"The current troubled economic environment has resulted in further erosion of advertising revenue," Mackie said. "We are currently working through the 2009 budget, and we anticipate some significant changes as a result of that process as we must align our expense structure to anticipated revenue." She said the company had made no final decisions and "there are no announcements to make at this time."
Seattle Post-Intelligencer Publisher Roger Oglesby told Crosscut that the Hearst-owned paper, which is in a joint operating agreement with the Times, has no layoffs planned for its news operation.