Digital First Media Contemplating Company and Newspapers Sale

By Sarah Price - 13 Sep '14 10:17AM

Digital First Media, the publisher of Denver Post and the Los Angeles Daily News, announced Friday that it is contemplating a sale of 76 of its newspapers and would also consider selling the company in a bid to explore strategic alternatives.

Digital First media is the second largest newspaper company in the United States in terms of circulation and has a strong portfolio of about "800 multi-platform news and information products that spans 15 states and includes 76 daily/Sunday newspapers, 160 weekly publications as part of serving 75 million customers monthly.

The move to dissolve comes in an effort to maximize value for shareholders.

"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. The companies that will succeed are those which have meaningful scale and digital expertise," John Paton, CEO of DFM said in a statement.

"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 that deliver outstanding local news and exceptional opportunities for advertisers," Paton added.

Media analysts believe that it will be extremely difficult to find a buyer for a portfolio so huge.

"They could decide to break up the business into different operating entities - a Rocky Mountain cluster, an East Coast cluster and a California cluster," Alan Mutter, a Silicon Valley media consultant told Denver Post.

"The pool of buyers for big newspaper companies is getting smaller by the day," another analyst told the New York Post.

But DFM said that this could be a good way to experiment with business in the media market.

"...one of benefits of making these announcements is you end up testing the marketplace for all of those options, rather than doing it theoretically," Paton said.