Times Mirror to Sell Dallas Newspaper for $110 Million
Times Mirror Co. said Thursday that it has agreed to sell the Dallas Times Herald to newspaper publisher William Dean Singleton for $110 million in cash and notes.
The sale will end 16 years of Times Mirror ownership in Dallas, a period that brought to the city a tense newspaper rivalry that is widely believed to have greatly improved both the Times Herald and the rival Dallas Morning News.
Singleton, who owns 21 newspapers in six states, said he will move his headquarters to Dallas. The Times Herald will become his largest paper.
Times Mirror said the price will allow it to more than recover its investment in the Times Herald, which it acquired in 1970 along with a Dallas television station in a transaction valued at roughly $95 million. Times Mirror, which will keep television station KDFW-TV, said it will know the exact amount of the gain after it strikes a definitive sales agreement with Singleton.
Times Mirror, based in Los Angeles, owns a variety of communications media and publishes eight newspapers, including the Los Angeles Times, Newsday, the Denver Post and the Hartford Courant. It also recently agreed to purchase the Baltimore Sun.
The agreement to sell the Times Herald, which requires governmental approval, is expected to become final this fall.
“Times Mirror is very proud of the achievements of the Dallas Times Herald,” said Times Mirror Chairman and Chief Executive Robert F. Erburu, “but we believe that its sale at this time is consistent with our corporate strategy.”
Wall Street analysts viewed the sale as a positive one for Times Mirror.
“A brilliant move,” said Victoria Butcher, an analyst with the brokerage firm F. Eberstadt & Co.
Analysts said they believed that the Times Herald, the second newspaper in the Dallas market, was inhibiting Times Mirror’s growth and would increasingly begin to draw funds from other operations.
“Even if they improved their position in Dallas, the paper would never contribute much to the bottom line” at Times Mirror, Butcher said.
Times Mirror stock rose $2 a share Thursday in New York Stock Exchange composite trading to close at $69.50.
The price named in the agreement is equivalent to roughly $424 per subscriber and something below 100% of annual revenue, said Bruce Thorp, an analyst with the New York brokerage firm of Lynch, Jones & Ryan. While this is lower than the price paid recently for newspapers in non-competitive cities, “it is probably realistic,” Thorp said, “and makes it worthwhile for Times Mirror.”
Publisher to Stay On
Singleton, 34, will buy the Times Herald through Gloucester County Times Inc. and own it in partnership with Richard B. Scudder, 73, a longtime newspaper publisher from New Jersey, and John Buzzetta, 35, publisher of the Star-Beacon in Ashtabula, Ohio. Singleton owns some of his papers through Gloucester and the others through Garden State Newspapers Inc., a partnership with Scudder and Media General Inc., a publishing firm.
Singleton said Times Herald Publisher Arthur E. Wible Jr. will remain with the paper. Editor Shelby Coffey III, hired earlier this year from his post as editor of U.S. News & World Report magazine, is still considering an offer to stay.
Singleton said he first broached buying the Times Herald in a lighthearted way at a dinner of publishers in San Francisco earlier this year when Los Angeles Times Publisher Tom Johnson, also a Times Mirror senior vice president, asked him about his goals in the newspaper business. The discussions evolved from there, becoming increasingly serious last Thursday. An agreement finally was reached Monday night.
Sources said at least one other bidder also made an unsolicited offer for the Times Herald. Times Mirror’s Erburu confirmed that “there was some other interest.”
Analyst Thorp, of Lynch, Jones & Ryan, said that “the strategy Singleton has followed in most other markets is to cut costs.” For instance, at the Hayward Daily Review, Fremont Argus and Tri-Valley Herald, three papers that Singleton bought last year near San Francisco, he fired roughly 20% of the employees, including about 25% of the news staff, shortly after taking over.
With those cuts, and the addition of innovative advertising sales programs, insiders there said, the group is enjoying higher revenue and profits.
Analysts estimate that the Times Herald, with a weekday circulation of 244,629, has made money each year that Times Mirror has owned it, earning about $17 million on revenue of $150 million in 1984. In 1985, earnings dropped on roughly similar revenue, analysts estimated. Times Mirror, which does not release financial details on individual papers, has said the paper lost money in the first quarter of this year.
In competitive terms, however, the paper has been losing ground to the rival Dallas Morning News for nearly a decade. The Times Herald’s share of the Dallas newspaper advertising market, for instance, has slipped to about 40% today from about 49% in 1978, analysts said. The News, which has a weekday circulation of 390,275, now leads the Times Herald in circulation by 145,646 daily and 173,643 on Sunday, according to the latest figures from the Audit Bureau of Circulations, the standard counting service for newspapers.
Also, the Times Herald’s profit margins are estimated to be below the industry average of about 15%.
“Times Mirror improved the Times Herald and brought a competition here, conducted on a very high plane, that was good for the city of Dallas,” said Burl Osborne, editor of the Morning News.
4 Pulitzer Finalists Each
In this year’s balloting for the prestigious Pulitzer Prize, both Dallas papers had four finalists, more than came from any city in the country.
“We plan to throw in all the advantages of local ownership, being on the scene and able to make quick decisions,” Singleton said in an interview. “As a private company, we don’t have to worry about quarterly earnings or what the Wall Street analysts might say, because we have only three shareholders.
“To Times Mirror, this might have been a troubled property. To us, it is a crown jewel,” he said.
Born and raised in north Texas, Singleton worked for nearly two years between 1970 and 1972 as a copy editor at the paper that will now become his rival, according to employment records at the Dallas Morning News. Singleton joined Albritton Communications Co. at age 25, becoming president of its newspaper division two years later. He formed his own company with Scudder in 1983.
Scudder, whose family founded the Newark Evening News in 1882, was publisher of that paper until 1972. Scudder also is co-inventor of a process to recycle newspapers, and his company, Garden State Paper Co., is the world’s largest manufacturer of entirely recycled newsprint.