Sun Co. weighs bid for papers

Local Landmark assets may interest publisher

January 05, 2008|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

Baltimore Sun Co. officials are evaluating a bid for local newspapers in Anne Arundel and Carroll counties currently owned by Landmark Communications Inc., of Norfolk, Va.

Landmark, owner of The Capital of Annapolis and the Carroll County Times, as well as other dailies and The Weather Channel, said Thursday that it has hired national investment firms to explore selling the family-owned company, either in whole or part.

A business development team at the Baltimore Sun, owner of The Sun, is considering whether to acquire any of the Landmark newspapers, which also include several weeklies in Anne Arundel County. The team plans to contact Landmark during the due diligence phase, a Baltimore Sun vice president said yesterday.

The Baltimore Sun's corporate parent, Tribune Co., which has grappled with declining revenue and competition from electronic media, last month completed its $8.2 billion sale to real estate billionaire Sam Zell and an employee stock ownership plan.

Timothy J. Thomas, Baltimore Sun vice president of business development, said the new business development team was designed to investigate opportunities such as Landmark's assets.

"And we are investigating as we speak," he said. "Does this make sense for us? Why does it make sense, and then what's the next step?"

The Sun last month closed its longtime bureau in Carroll County, where the Carroll County Times is the dominant local daily, and operates a bureau in Annapolis, home of The Capital. Both Carroll and Anne Arundel counties are part of The Sun's core circulation area.

Even at a time when newspapers are losing circulation and advertising revenue, a sale of The Capital would likely generate strong interest from investors or publishing rivals, said John Morton, president of Morton Research Inc., a Silver Spring media consulting firm.

"Here is a paper that has not lost circulation over the past years, and it is in a very attractive market in a lot of respects," he said.

Acquiring established newspapers in its coverage area would make sense for the Baltimore Sun, although acquisitions also have the potential to run afoul of antitrust laws, Morton said.

"It would enlarge The Sun's footprint in their region, which is usually a desirable thing for a newspaper to do," he said. An issue is "whether the Justice Department would feel it would be too much ownership by one company of media within a fairly well-defined geographic area."

The Baltimore Sun has followed a similar strategy in the past. In 1997, while a subsidiary of the Times Mirror Co., the company acquired Patuxent Publishing Co., which owns 15 community newspapers, including the Towson Times, Columbia Flier and Westminster Eagle. It also owns Homestead Publishing Co., which publishes The Aegis and The Record in Harford County.

A decision has yet to be made on whether Landmark will pursue a sale, said Richard F. Barry III, vice chairman of Landmark.

Landmark's flagship newspaper is The Virginian-Pilot in Norfolk. The company also owns The Greensboro News & Record in North Carolina and The Roanoke Times in southwest Virginia.

"We've just started this process, and have made no decision one way or another," Barry said. "If it does come to a sale and we pursue that route, we would consider a sale in whole or in piece. Any combination would be possible."

Besides The Capital, Landmark's Capital Gazette Communications owns the twice-weekly The Maryland Gazette, and Anne Arundel weeklies The Bowie Blade-News, The Crofton News-Crier, The West County Gazette and the South County Gazette as well as the quarterly Waterfront Living Magazine.

lorraine.mirabella@baltsun.com

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