Palm Beach Post, Daily News to be sold to fast-growing GateHouse

WEST PALM BEACH, Fla. -- One of the nation's busiest acquirers of newspapers and online media has agreed to buy The Palm Beach Post and Palm Beach Daily News in a deal announced Wednesday at $49.25 million.

Executives at New York-based New Media Investment Group Inc. said the sister papers will join a growing GateHouse Media stable of more than 140 daily newspapers. That represents more than 1 in 10 in the country.

The papers and associated websites have been owned since 1969 by Atlanta-based Cox Enterprises. The sale is expected to be completed by May.

"We see Palm Beach as another attractive and growing market that fits in well with our current Florida footprint," said Michael E. Reed, New Media's president and CEO. He called the papers "the primary source of news in their respective communities for over 100 years" and said they have "created high digital engagement that we are excited to work to build upon."

Publicly traded New Media Investment Group (NEWM) has been on a buying spree in an industry grappling with change and consolidation. Earlier this month, the company announced it had agreed to purchase another Cox property, the Austin American-Statesman newspaper and related publications in Texas, for $47.5 million.

"We are so grateful to the talented team in Palm Beach for their relentless execution of quality journalism and service to the community," said Kim Guthrie, president of Cox Media Group. "When selecting a buyer for both papers, we sought a company that would build on their role as trusted local brands. We know The Post will make GateHouse proud."

GateHouse has had "good success, better than most" in profitability, and has come with "a pretty well-earned reputation for running lean," said Rick Edmonds, media business analyst for the nonprofit Poynter Institute in St. Petersburg, Florida.

Staff reductions have followed a number of acquisitions, he noted. GateHouse strives for efficiency by centralizing certain functions such as the layout of pages, he said. At the same time, the company has been buying larger papers lately and in a recent earnings call company officials "were talking about doing more investigative reporting and projects," Edmonds said.

Cox announced its Palm Beach and Austin papers were for sale last fall. Privately held Cox will continue to operate newspaper businesses in Atlanta and Ohio, markets where it also owns radio and TV stations.

With the purchase, GateHouse extends a growing Florida presence that will reach for the first time into the state's southeastern corridor. The company owns 20 other Florida newspapers, with 11 dailies in cities including Sarasota, Jacksonville, St. Augustine, Daytona Beach, Gainesville and Lakeland.

As the West Palm Beach market's flagship newspaper, The Palm Beach Post has daily print and paid digital circulation of nearly 80,000 and 102,000 on Sundays, according to company officials.

The Palm Beach Daily News, also known as The Shiny Sheet, has been published for 120 years. The Shiny Sheet has a daily circulation of more than 4,500 and is printed daily from October to May and twice weekly during the summer.

Print and online versions of the publications reach more than 44 percent of adults in the market, officials said.

Cox will retain ownership of The Post's building at Dixie Highway and Belvedere Road in West Palm Beach. The 7-acre parcel has a market value of $15.4 million, according to the Palm Beach Property Appraiser's Office.

Company executives told employees Wednesday in West Palm Beach all will initially be retained at current pay, though they said each market is different and they could not address future staff levels.

GateHouse Media CEO Kirk Davis praised "the awards you win" and "the people who produce such high-impact stories" in a memo to newspaper employees and said his company stands "committed to investing in our print and digital products."

Publisher Tim Burke called it "very important for us to find a buyer that would build on our longstanding commitment to investigative journalism, our community and our advertisers." He characterized GateHouse as "committed to continuing this tradition" while investing in digital products and innovation.

At the start of 2018, New Media Investment operated in more than 565 markets across 38 states. The company says it "supports small to midsize communities by providing locally focused print and digital content to its consumers" as well as offering marketing and technology services to small and medium-sized businesses. Executives figure they reach more than 22 million people a week and serve approximately 215,000 business customers.

Some 85 percent of its daily newspapers have been published for more than 100 years, New Media Investment Group's website notes.

New Media Investment Group says it is externally managed and advised by an affiliate of Fortress Investment Group LLC, a global investment management firm. Before Wednesday's announcement, company officials said they had spent more than $891 million on acquisitions in recent years.

"We are looking forward to welcoming the Palm Beach employees to the New Media team," Reed said, "and look forward to carrying on their legacy of strong local journalism."

Charles Elmore writes for The Palm Beach Post. Email: celmore(at)pbpost.com.

Story Filed By Cox Newspapers

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