By DERRICK GINGERY, Greater Fort Wayne Business Weekly
derrickg@fwbusiness.com
The Inskeep family lost in its attempt to return the News-Sentinel to local ownership and take control of Fort Wayne Newspapers.
Ogden Newspapers, a family-owned company based in Wheeling, W.V., was announced as the winning bidder for Fort Wayne's afternoon newspaper last week.
Journal Gazette Publisher Julie Inskeep said her family and Jerry Henry Jr., president of Midwest Pipe and Steel Inc., submitted a bid for the paper that would have given the Inskeeps majority control of Fort Wayne Newspapers, the business arm of both publications, and made Henry publisher of the News-Sentinel and a minority shareholder in the company.
The Inskeeps tried to purchase the competing paper to ensure the company was controlled by a newspaper publisher and not a venture capital firm, she said.
Even though her bid was not accepted, Inskeep said last week she was relieved following the announcement of the buyer. Inskeep said the joint operating agreement between the two papers will remain intact. She also made it clear that her family was not interested in selling the Journal Gazette.
“Now I feel we're partnering with a company that has similar values,” she said. “The temptation to manage for the next analyst report or quarter's results is really diminished.”
Inskeep would not say how much her group bid for the News-Sentinel. Henry could not be reached for comment.
The News-Sentinel's sale was part of McClatchy Co.'s plan to sell 12 Knight Ridder newspapers it did not want. In March, McClatchy agreed to buy the Knight Ridder chain for $4.5 billion.
McClatchy announced five newspaper sales last week, including the News-Sentinel. One paper, American News in Aberdeen, S.D., was sold to South Bend-based Schurz Communications Inc., which owns the South Bend Tribune.
The five papers combined sold for about $450 million, according to McClatchy.
“Each of the papers identified for divestiture has received a tremendous amount of interest from a large variety of bidders, and the Fort Wayne JOA and the News-Sentinel was no exception,” McClatchy CEO Gary Pruitt said in a written statement.
Ogden Newspapers publishes 39 daily newspapers in 10 states with a combined daily circulation of 500,000. That includes The Intelligencer and News-Register in Wheeling, which respectively are morning and afternoon papers.
Ogden CEO Robert Nutting did not return several calls seeking comment.
“Here in the Ohio Valley - we publish one morning and two separate afternoon papers - so we know and understand the benefits of the dynamic of a community served by multiple newspaper voices,” Nutting said in a written statement announcing the sale.
The deal is expected to close as soon as possible after McClatchy's purchase of Knight Ridder is completed, likely this summer.
The News-Sentinel and Journal Gazette are published under a joint operating agreement. The contract allows both papers to maintain separate independent editorial staffs, while sharing business operations and a single advertising staff, through Fort Wayne Newspapers.
Knight Ridder, when it owned the News-Sentinel, also owned 75 percent of Fort Wayne Newspapers, which will be taken over by Ogden Newspapers. The Inskeep family, which publishes the Journal Gazette, owns 25 percent.
Julie Inskeep said her bid would have required approval from the U.S. Department of Justice, which oversees newspaper joint operating agreements. She said that may have weakened their chances because McClatchy wanted to complete the sale quickly.
Inskeep said she knows Nutting through work both have done with the Newspaper Association of America. She said no big changes are expected, and the Ogden officials are saying they want to move slowly and learn the operation before doing anything.
“Their method of operation is a lot of local autonomy,” Inskeep said.
Steven Broas, News-Sentinel Publisher and Fort Wayne Newspapers CEO, could not be reached for comment.
Employees at both papers find themselves in an awkward position because the paper is changing hands twice before the first deal is done. Inskeep said employee benefits are expected to stay as are during the transition.
“Ogden is promising to make it as seamless as possible,” she said.
A new printing press also is under construction next to the existing Fort Wayne Newspapers building on Main Street near St. Joseph Hospital. As owner of the new building, Ogden Newspapers is expected to complete the project.
Newspaper industry analyst John Morton of Morton Research Inc. said the purchase makes sense for Ogden Newspapers, which has historically owned small to medium-size operations.
Morton said he has not heard any negative commentary about the company, but there is little likelihood that it will be able to stem the News-Sentinel's slide. Since December 2002, circulation has dropped 38 percent.
“There is nothing really that they can do,” Morton said. “The contract sentences the paper to the afternoon position.”