New owner: Maine papers poised to be profitable

The new chief executive of the Portland Press Herald and two other Maine dailies says his company is poised to be profitable, but future cuts at the newspapers might cost 100 employees their jobs.

The MaineToday Media Inc. investment group led by Richard Connor bought the Press Herald, Kennebec Journal in Augusta and Morning Sentinel in Waterville on Monday from The Seattle Times Co. for an undisclosed price. The sale includes MaineToday Web sites and niche publications.

In Tuesday's Press Herald, Connor said the newspapers will be profitable by year's end, if not sooner, despite falling ad revenues and declining circulation.

"I've known these papers my entire life and understand their considerable value as critical information sources within their community and throughout the state," Connor said.

Connor, a Bangor native, has spent the last 15 months arranging for the purchase of the Maine newspapers. The newspapers have about 500 employees and a combined circulation of nearly 100,000 daily and 135,000 Sunday.

In lining up financing, he teamed up with HM Capital Partners, a private equity firm in Dallas that also owns The Times Leader in Wilkes-Barre, Pa., where Connor is editor and publisher. Connor formerly served as president and publisher of the Fort Worth Star-Telegram and in the 1990s founded a company that owned two dailies and 70 weeklies in four states.

Connor plans to sell the Press Herald's three downtown properties - two buildings and a parking garage - that were part of the deal, with some workers moving to the company's facilities in South Portland where the printing press is located and others working out of leased space downtown. The buildings were being shown to a prospective buyer on Tuesday, he said.

With the completion of the sale, 31 nonunion employees had their positions eliminated on Monday. Connor said there could be up to 100 more job cuts to come.

Connor said the papers will focus on local news and local advertising, a community-oriented formula that he said has worked well at his Wilkes-Barre newspaper. But he said the Maine properties won't be a clone of The Times Leader.

"I don't think you would find a lot of similarities in the newspapers I've edited, other than a strong emphasis on local news," Connor said.

The Seattle Times Co. was reported to have paid upward of $200 million in 1998 for the former Guy Gannett chain, but the price that newspapers fetch has declined sharply amid a drop in ad revenues and the migration of readers to the Internet. Guy Gannett was a family-run business with no connection to the much bigger Gannett Co.

Seattle Times Publisher Frank Blethen said his family was reluctant to sell the Maine newspapers but needed to focus its attention on its newspapers in Washington. He noted that his great-grandfather Alden Blethen, who founded the Seattle Times in 1896, was a Maine native and his family had a special affinity with Maine.

"Local, independent newspaper ownership best serves communities, and we are pleased Rich Connor was able to put together a group to buy Blethen Maine Newspapers," Blethen said.

The closing of the sale followed a vote late last month by the Portland Newspaper Guild to accept a 10 percent pay cut and other contract concessions in return for a 15 ownership stake in MaineToday Media.

"Our ownership stake will motivate workers and increase morale across the new company. We are proud of what we have accomplished here and are excited about the future," said Tom Bell, union president.