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New York • Digital First Media, which oversees The Salt Lake Tribune and Park City's Park Record, announced Friday that it will "evaluate and consider strategic alternatives" that could lead to the sale of some or all of the company.
CEO John Paton said the company has retained UBS Securities to review a full range of alternatives including selling the entire company, selling regional clusters or doing nothing.
"We believe we have many options available to us to maximize the value of our businesses for our stockholders and the board of directors has therefore decided to assess the full range of these opportunities," Paton said.
In a statement, the company said there are no assurances that the process will result in a transaction or transactions or on the timing of any decisions. The company also said that it will not disclose developments in the process until the board decides how it will proceed.
Digital First, based in New York, was formed in December 2013 with the merger of MediaNews Group and the former Journal Register Co. It is the nation's second-largest newspaper company, based on circulation, operating in 15 states, with 800 multi-platform news and information products, including 76 daily and Sunday newspapers and 160 weeklies. The company said it serves 75 million customers monthly.
The company is controlled by the hedge fund Alden Global Capital.
It has been approached by various interested parties over the past months, said Paton, but there have been no "formal or serious" discussions.
While the company could be sold in whole, or in regional chunks or expanded or not sold at all, "one of benefits of making these announcements is you end up testing the marketplace for all of those options, rather than doing it theoretically," he said.
The combined companies are closing in on $200 million in digital ad revenue a year, he said. "The strategy we pursued was to put the companies together and to drive digital revenue relentlessly."
At the same time, the spinoffs of print publishing by a number of media companies have received a good reception from investors, he said. "Over the past year what you have seen is a remarkable resurgence in the market, with the realization of the real power of media companies to go forward."
Media analysts said it would be hard to find a buyer for Digital First Media as a whole, and that a more likely course would be for regional buyers to acquire pieces of the company.
"They could decide to break up the business into different operating entities a Rocky Mountain cluster, an East Coast cluster and a California cluster," said Alan Mutter, a media consultant and former newspaper executive based in Silicon Valley who blogs regularly on the state of the media.
While the company cautioned that there is no time limit on discussions, newspaper analyst Ken Doctor of Outsell, who first reported that Alden Global Capital was getting ready to sell Digital First Media, predicted a sale in the near future.
"I think we'll see largely the dissolution of this company within six months," Doctor said.
Media analysts have speculated since last spring about Digital First's future after the company shut down its experimental, centralized digital newsroom, called Project Thunderdome. Paton said Friday's action is unrelated to Thunderdome, which was one of many digital experiments the company has undertaken under his leadership.
"The news information industry in America is undergoing a period of seismic change, defined by the need to consolidate to rapidly compete in a digital world," Paton said. "The companies that will succeed are those which have meaningful scale and digital expertise. By anticipating the rapid revolution in our industry and responding to stay ahead of the curve, DFM has clearly emerged as a leading player, based on the high quality of our assets and the extensive work we have done to transform them into multi-platform products."
Digital First's largest properties include The Tribune, the San Jose Mercury News, The Denver Post, the Los Angeles Daily News, The New Haven Register, the St. Paul Pioneer Press.