Catching the Falling Knife versus Personal Branding – April 2015 M&A Activity
A Maine newspaper group has cleaned up its balance sheet, improved the quality of its journalism, and plans to improve the efficiency of its print operations. MaineToday Media announced that it is being purchased by local businessman and publisher Reade Brower. Brower teamed up with Chris Miles, his partner in another venture, Alliance Press, to purchase the papers from billionaire hedge fund manager S. Donald Sussman. Sussman saved MaineToday Media, Maine’s dominant news organization, from almost certain closure in 2011 when he purchased the insolvent company from HM Capital Partners.
Sussman reportedly invested a total of more than $16 million in the publishing company. He appears to be walking away happy even though the entire proceeds from the latest sale are going to pay down company debt. In an eloquent commentary on the value of maintaining high journalistic standards in the print medium, Sussman stated that it was his “honor to have been the steward of these trusted newspapers.” It remains to be seen if the buyers have caught the falling knife (the company has been sold four times in 17 years, each time for far less than before), or if they can continue to uphold the “value of local, quality journalism and the civic responsibility the paper has to its community.”
This commitment to produce exceptional reporting stands in stark contrast to the model of delivering repetitive, regurgitated content delivered via online aggregators. Poor quality content apparently does not hold up, as evidenced by the recent closure of the Philadelphia-based company Brand.com. Originally named Reputation Changer, the company was in the business of writing positive articles about folks who had numerous negative online reviews. The company then flooded online sites with the ersatz positive articles in hopes that the onslaught would push negative articles below page one on Google. When Google got wise and changed its algorithm to minimize the effectiveness of the article blitz, Brand.com switched gears. In the journalistic version of advertising disguised as independent reporting (so-called “native advertising”) the company began offering “commission reporter-written articles.” The strategy failed, there was no billionaire hedge fund savior for Brand.com. The company filed for Chapter 7 liquidation in April.
Note: As regular readers of The Target Report will know, we usually steer clear of the “defense-of-print” debate and leave that to others. The chips will fall where they will as consumers make their decisions on the value of content within competing media channels and vote by how they view their news, read their books, obtain intellectual content and respond to advertising. Nonetheless, we think that the above contrasting developments are interesting and moreover, we suspect that the folks in Maine are happy to have reporting they can trust, sustained through the survival of their local newspapers.
