Capital, Landmark swap assets

Merrills trade papers for 100% of magazine

April 26, 2007|By Hanah Cho | Hanah Cho,Sun reporter

The Merrill family said yesterday that it is transferring controlling ownership of The Capital and other newspapers to Landmark Communications Inc., ending family control of the Annapolis media company that spanned nearly four decades.

As part of the deal, Landmark will swap its ownership in the Washingtonian magazine for full control of the newspaper properties. In exchange, the Merrill family will gain 100 percent ownership of the Washingtonian.

Landmark, publisher of The Virginian-Pilot, owned 49.9 percent of Capital-Gazette Communications that the Merrill family did not control. The partnership has been in place since 1975.

The ownership change comes nearly a year after the death of publisher Philip Merrill, who committed suicide on his boat in the Chesapeake Bay in June.

Merrill, a philanthropist and former diplomat, began his foray into publishing with the purchase of what was then the Annapolis Evening Capital in 1968 and oversaw the growth of news operations and circulation in Anne Arundel County. Besides The Capital and Washingtonian, Capital-Gazette owns the Maryland Gazette, Bowie Blade-News, Crofton News-Crier, and the West County and South County Gazette. Merrill bought Washingtonian in 1979 and owned Baltimore magazine from 1977 to 1992.

The transaction, which also involves the settlement of smaller assets, is expected to close in the next several months. Financial terms were not disclosed.

The Washingtonian announced yesterday that Eleanor Merrill, who was serving as the magazine's publisher emeritus, would become chairman of its board. Merrill's daughter, Catherine Merrill Williams, will become the magazine's new publisher.

The two women declined interviews through a spokeswoman yesterday.

"Phil and I were blessed to have had a strong and personal relationship with Landmark Communications for 32 great years," Eleanor Merrill said in a statement.

"Although this decision has been a difficult one for me, I am confident that Landmark will preserve the traditions that have made our newspapers such an integral part of their communities. I wish them well and thank our readers for being a part of our lives for nearly four decades," she said.

Operations at The Capital and its sister newspapers as well as the Washingtonian are not expected to change, said Landmark and Capital-Gazette executives. The newspaper group employs about 325 workers, while the Washingtonian has some 65 employees, said James Brown, Capital-Gazette's president and chief executive officer, who will remain in his posts.

Eleanor Merrill will serve as a consultant to Capital-Gazette newspapers.

Richard F. Barry III, vice chairman of family-owned Landmark, who was in Annapolis yesterday to announce the news, said talks between the two parties about an exchange of properties began several months ago after Philip Merrill's death.

Barry said Eleanor Merrill was interested in keeping control of the Washingtonian because she has a daughter "who would very much like to take that on as a legacy from her father."

The Capital-Gazette newspapers will join Landmark's community newspapers division, which publishes numerous dailies including the Carroll County Times in Westminster, said R. Bruce Bradley, president of Landmark Publishing.

Besides the Pilot in Norfolk, Va., Landmark also owns the News & Record in Greensboro, N.C., and The Roanoke (Va.) Times as well as two television stations and other assets, including the Weather Channel Cos.

Analysts and others were not surprised by yesterday's news, considering the lengthy partnership between Norfolk-based Landmark and the Merrill family.

"I think Landmark will be a good custodian of Phil Merrill's legacy there," said John Morton, a newspaper analyst in Silver Spring. "Merrill himself was not replaceable in a lot of ways. [But] Landmark publishes good newspapers, and I'm sure that will continue to be the case in Annapolis."

Thomas Kunkel, dean of the college of journalism at the University of Maryland that bears Philip Merrill's name, said some wondered whether Eleanor Merrill was interested in operating both the newspaper group and the Washingtonian.

"When they took over the Washingtonian, it cemented Phil and Ellie as the center of Washington life," Kunkel said. "Phil was in and out of government. When you go to a Washingtonian party, basically all of institutional Washington is there. It's just that Merrill and Washingtonian are so inseparable that I can appreciate if they were going to stay in publishing at all, they would hang onto the Washingtonian."

hanah.cho@baltsun.com

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