Michael Ferro’s mission to save journalism — and his reputation as a media dealmaker — was tarnished after a thwarted attempt to buy the Chicago Sun-Times and a reported bid for US Weekly that went nowhere.
Now, Ferro is back at it, snapping up the New York Daily News and adding the nation’s largest media market to his group of dailies that also includes the Los Angeles Times, the Chicago Tribune and the Baltimore Sun. His newspaper company, Tronc Inc., agreed to pay $1 — the price of one issue on the newsstand — and assume operational and pension liabilities, which two people familiar with the deal value at more than $100 million.
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Ferro is betting he can reimagine the 98-year-old tabloid under his unique vision for the future of news. The software engineer, whose company once posted a want ad for an employee to assist “news content-harvesting robots,” has promised to unveil a “content monetization engine” that would unleash newspapers’ true potential as a “rock star business.”
It’s been tough sledding so far. Newspaper advertising revenue fell 16% in the first six months of this year to $283.5 million, and the 0.3% gain in circulation wasn’t enough to make up for it. Digital ad sales also dropped. Tronc’s largest newspaper, the L.A. Times, went through a management shakeup last month, ousting four top editors.
Ferro gets larger national advertising opportunities by acquiring the Daily News, making him a newspaper owner in New York and Los Angeles, the two top media markets. Tronc now also holds more newspapers in the Northeast, including the Hartford Courant in Connecticut and the Morning Call in Allentown, Pennsylvania, which may help save on printing costs.
The decline in print advertising — and newspapers’ struggles to compete against Google and Facebook Inc. for online ads — has led Tronc and rivals including Hearst Corp. and Gannett Co. to buy more papers to gain scale and cut costs. Last year in the U.S., 50 daily newspapers changed hands in 28 deals, according to newspaper merger-and-acquisition firm Dirks, Van Essen & Murray. The deals were driven largely by families or small newspaper groups getting out of the business.
The acquisition of the Daily News marks the highest-profile media deal for Ferro since he bought into Tronc last year through his Merrick Ventures LLC and told interviewers he wanted to rescue journalism from its losing battle against the internet for advertising sales.
The celebrity-obsessed Ferro also gains access to a market with no lack of bold-faced names. The New York Daily News, which has garnered 11 Pulitzer prizes including one this year for public service journalism, “helped shape the dynamics of the city,” Mortimer Zuckerman, 80, owner and publisher since 1993, said in the statement. The Daily News, which has long held a tabloid rivalry with the New York Post, has gained attention over the past year with provocative covers critical of Donald Trump.
Arthur Browne, editor-in-chief of the Daily News, will remain in that role and has also been named publisher, according to the statement. He will report to Tronc President Timothy Knight. The newspaper group will now operate in 10 major U.S. markets and have more than 80 million unique monthly digital visitors.
The deal gives Ferro a win after a series of deal attempts that didn’t go through. Tronc’s proposal to buy cross-town rival Chicago Sun-Times owner Wrapports L.L.C., where Ferro formerly owned a stake, was rejected by regulators on concern it would be bad for competition. Tronc, formerly known as Tribune Publishing Co., bid $56 million last year for Freedom Communications Inc., publisher of the Orange County Register in California, but the U.S. Justice Department sued to block the deal.
The Daily News deal includes 100% ownership of a printing facility in New Jersey, Chicago-based Tronc said in a statement late Monday. Methuselah Advisors advised the sellers on the transaction, according to the statement.
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