The long-anticipated change of ownership for Southern Oregon's two daily newspapers — the Mail Tribune and Daily Tidings — came to fruition Tuesday when an affiliate of Fortress Investment Group LLC acquired the Dow Jones Local Media Group, a unit of global media giant News Corp.
The Medford and Ashland dailies, which along with The Nickel make up the Southern Oregon Media Group, will be managed by GateHouse Media, one of the largest publishers of locally based print and online media in the United States, with a portfolio of more than 400 community publications — including 78 daily newspapers and 235 weekly papers — and approximately 350 websites.
The Mail Tribune has had a short list of owners since 1919 when Robert Ruhl acquired control of Southern Oregon's primary news gathering organization. The Ruhl family controlled the newspaper until Ottaway Newspapers, a Dow Jones unit, purchased the Mail Tribune in 1973. Ottaway purchased the Ashland Daily Tidings and The Nickel in October 2002.
Rupert Murdoch's News Corp bought Dow Jones for $5 billion in 2007. Murdoch made it clear early on that he had little interest in community newspapers, but efforts to sell the Ottaway group at first went nowhere as the Great Recession struck and Internet spawned-competition chiseled away at print industry revenue and profits.
The newspaper industry metamorphosed economically as well as technically in that period. Family-owned newspapers gave way to small groups, which have been engulfed by larger chains.
"You had a lot of long-standing families that owned newspapers 50 years, 60 years," Mail Tribune and Daily Tidings Publisher Grady Singletary said. "You see a lot of family-owned properties that meld into larger organizations, because of the efficiencies and synergies and it's likely that the families themselves have less interest in being newspaper owners or being involved in media."
After Ruhl bought an interest in the Mail Tribune in 1911, he edited and published it until 1967. His family continued to oversee the newspaper until 1973, when it was sold to Ottaway Newspapers, at which time Stephen W. Ryder became publisher. Gilbert Bogley, Beverly Jackson and Gregory Taylor served in the same capacity prior to Singletary.
The Ashland Daily Tidings first published on June 17, 1876, and has gone through a long list of owners. In 1980, Capital Cities-ABC bought the newspaper, selling it to Disney in 1996. Lee Enterprises acquired the daily in 1999 and operated it for three years before selling it to Ottaway and connecting it to the Mail Tribune.
"You look at the Ruhl family and the lineage we had there which was tremendous and then the Ottaway family that owned us as we merged with Dow Jones," Singletary said. "While those things are another phase and step in our own growth and progress as a newspaper entity, change in ownership is likely inevitable.
"It's just something that tends to be the pattern for all newspaper companies, although there has been so much consolidation now that you see less and less these days. The large expense to manage and produce quality products requires economies of scale to really make those things work for the best."
— Greg Stiles
The sales price wasn't disclosed, but the sale was expected following months of tire-kicking by media corporation representatives. Once News Corp spun off its television, film and entertainment properties into a separate company in June, it became a matter of time before a deal was consummated.
The SOMG's 123 employees were informed of the sale Tuesday afternoon by Publisher Grady Singletary.
"I am very pleased that the ownership of the Southern Oregon Media Group will transition to companies that believe in a strong community presence," Singletary said.
Southern Oregon communities will continue to be served as they have for more than a century, he said.
"I'm not sure you ever get used to transitioning to new owners. But I think, again, the positive from this change is that we have ownership committed to community journalism and providing quality products to the advertising community. While there will be changes that we will face, changes in systems and how we function, our focus on providing quality products — print and online — that doesn't change, that will never change."
Dow Jones Local Media Group operates 33 publications, including eight dailies in Oregon, California and the Northeast, and 15 weeklies in seven states. All but 10 corporate-level staff members of the group's more than 1,200 employees will be retained by the buyer.
Robert Thomson, chief executive of News Corp, said in a statement the community papers had a strong tradition, but didn't fit with the company's future interests.
"We are confident that the papers will prosper under the new owners," Thomson said. "But they were not strategically consistent with the emerging portfolio of the new News (Corp)."
The Mail Tribune joined News Corp in 2007 when the Rupert Murdoch-controlled media conglomerate acquired its parent company, Dow Jones Corp., and The Wall Street Journal.
New York-based Fortress Investment Group, a publicly traded investment firm, is the principal shareholder of GateHouse Media. Fortress earned $63 million on revenue of $970.1 million in 2012.
Fortress operates several funds, including private equity and hedge funds. Parties in the transaction didn't identify the affiliate that gained ownership of the newspaper group.
GateHouse Media is based in Fairport, N.Y. The company lost $31.6 million during the first six months of 2013 on revenue of $230.1 million. Its over-the-counter stock has been selling at 5 cents per share and there have been numerous reports in the financial media that it is considering seeking bankruptcy protection to address more than $1 billion in debt coming due next year.
"The newspaper industry and (GateHouse Media) have experienced declining same-store revenue and profitability over the past several years," the publishing firm said in a Securities and Exchange Commission filing last month. The company said it had suspended cash dividends, reduced costs and sold non-core assets.
While the Fortress affiliate is purchasing the Local Media Group, the newspapers and websites will report to GateHouse and local employees will share the same management, benefits and corporate support as workers at other GateHouse entities.
In an email to LMG employees, GateHouse Media CEO Mike Reed wrote: "We view LMG as a company with a sustainable path forward, providing we collaborate, evolve our business model and execute well."
Bernie Szachara has been named general manager, overseeing the group that includes the Southern Oregon Media Group. During the past year with FTI Consulting, Szachara's clients included Advance Central Services, Yellow Pages Group (New Zealand) and Hearst Corp. Among his previous stops he worked for the Denver Post and Gannett.
The Mail Tribune has been linked with Dow Jones for four decades. During that period, the newspaper evolved from a nine-column broadsheet produced with hot-lead type to a news product produced electronically and available online as well as in newsprint. Both the Medford and Ashland newspapers and their websites have produced award-winning content and Editor Bob Hunter anticipated similar efforts going forward.
"We don't really know what this will mean yet, but I do know that we have a group of professional, experienced journalists here and we intend to continue producing the best newspapers and websites that we possibly can," Hunter said. "That remains in our control and we don't intend to back off in our coverage in any way."
Reach reporter Greg Stiles at 541-776-4463 or firstname.lastname@example.org. Follow him on Twitter @GregMTBusiness.