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August 1, 2007

Does Dow Jones deal mean sale of local papers?

FALL RIVER, Mass. -- The fate of several New England newspapers owned by Dow Jones & Co., which has agreed to be acquired by the News Corp., remains unclear today.

In an e-mail sent this morning to Dow Jones employees -- including reporters at The Standard-Times, in New Bedford -- Richard F. Zannino, the Dow Jones chief executive officer, said the sale will “accelerate” progress at Dow Jones publications.

“First and foremost, Rupert Murdoch and News Corp. will be investing in a growing, profitable and vibrant enterprise,” Zannino said in his memo. “News Corp. has the money -- and the intention -- to invest in our businesses on a scale we can’t.

“We can’t have great journalism without a great business to support it,” Zannino added. “And without the journalism, there is no business. This combination with News Corp. acknowledges as much in a very real way.”

Zannino’s 875-word letter, however, does not mention the local newspapers, and it leaves open the possibility that Murdoch might choose to sell some or all of Dow Jones’ local publications. A press release from Dow Jones about the sale also avoided discussion about the future of the local newspapers.

“I know this doesn’t end the uncertainty,” Zannino said. “Closing a transaction of this sort will likely take three months or so. And we can’t begin to predict the details of the integration to follow.”

Dow Jones & Co., the corporate parent of The Wall Street Journal, owns Ottaway Newspapers Inc., a national chain of local newspapers that includes several prominent New England publications.

The company’s Local Media Group includes at least 12 publications in Massachusetts, such as the Cape Cod Times, The Standard-Times, in New Bedford, The Inquirer and Mirror, in Nantucket, and The Barnstable Patriot. It also owns daily and weekly newspapers in Maine and New Hampshire.

-- Journal staff writer Benjamin N. Gedan

The local daily newspapers had an average circulation of 282,000 last year, according to filings with the U.S. Securities and Exchange Commission. Including the non-daily publications, the newspapers generated $252 million in sales in 2006, up $2.3 million, or nearly 1 percent, over the previous year. Net income for Dow Jones’s local newspapers was $48.2 million.

Based in Campbell Hall, N.Y., the Ottaway newspapers circulate in markets where the median income is $56,300, according to Dow Jones.

James H. Ottaway started the newspaper chain in 1936. His son, James H. Ottaway Jr., served as publisher of The Standard-Times, which Ottaway acquired in 1966 along with the Cape Cod Times. In 1970, Dow Jones bought the Ottaway group.

The current chief executive officer of the Ottaway group, John N. Wilcox, was named president and publisher of the Cape Cod Times in 1996, six years before he was transferred to the Ottaway corporate offices to serve as executive vice president.

Posted by Mike McKinney at 1:01 PM | Permalink

August 1, 2007

Does Dow Jones deal mean sale of local papers?

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