NEW YORK (Reuters) - The New York Times Co is nearing a sale of 16 regional newspapers spread across the U.S. Southeast and California to Halifax Media Holdings, it said on Monday.
The possible sale, news of which comes just days after the Times Co announced the sudden retirement of its chief executive, is the latest in a series of steps the company has taken to cut costs and focus on its most important newspapers and their websites. One analyst, Hale Holden of Barclays Capital, estimated proceeds from the sale could run in the neighborhood of $150 million to $175 million.
With a weekday circulation of about 430,000, the newspapers included in the Times Co’s regional media group are largely scattered across the U.S. Southeast and California. Among them are the Sarasota Herald-Tribune, The Ledger, Star-Banner, The Gainesville Sun and News Chief in Florida; Herald-Journal in South Carolina; and The Press Democrat in California.
The Boston Globe, which the Times Co had previously considered selling, is not among the papers that make up the regional media group and thus is not part of the proposed sale.
As a group, the regional papers have struggled recently because of weak local retail and national advertising, partly reflecting the broad struggles of the economy. In the first nine months of the year, the group had a combined revenue of $190 million, down about 6.7 percent from the prior year. They account for roughly 11 percent of the Times Co’s overall revenue.
If the deal is completed, the papers, which have collectively won five Pulitzer Prizes, will become part of Halifax Media. That company owns The Daytona-Beach News Journal, among other papers and media businesses across the south.
“The prospective sale is a surprise to us. Previously, management has described the regional assets to us as strategic and emphasized that it remains focused on the core print business,” said Holden in a research note. “However, we view the potential sale as part of a broader repositioning of the portfolio towards digital media.”
The Times Co confirmed it was in talks to sell the newspapers after reports surfaced in the media, including JimRomenesko.com. That website, which focuses on journalism, displayed a screenshot of the Halifax Media Group’s corporate website that pre-emptively showed it as the owner of the Times Co’s regional papers.
Halifax Media Group’s page was later taken down and the company could not be reached for comment.
Shares of the Times Co dropped 21 cents, or 2.9 percent, to $7.15.
Reporting By Paul Thomasch; Editing by Gary Hill