Dow Jones sets stage for Mail Tribune sale

Dow Jones' sale to Rupert Murdoch's News Corp. is expected to be completed in mid-December. But it appears the Mail Tribune will not remain in the News Corp. fold for long.

Dow Jones, parent company of the Medford-based paper, announced plans Tuesday to explore options for selling the Ottaway Newspapers group, which includes the Mail Tribune, Ashland Daily Tidings and The Nickel.

"The options under consideration include the possible sale of some or all of those papers and associated media properties," Dow Jones said in a release.

Last summer, News Corp. agreed to buy Dow Jones, publisher of The Wall Street Journal, for $60 a share, or more than $5 billion. In August, Murdoch, News Corp.'s chairman and chief executive, said he planned to sell the community newspapers to concentrate on Dow Jones' primary news and financial-information assets.

Dirks, Van Essen and Murray, a newspaper merger-and-acquisition firm based in Santa Fe, N.M., has been hired to broker possible deals. So far this year, the firm has brokered 14 deals involving newspapers or publishing groups.

A spokesperson for the New Mexico broker referred interview requests to Dow Jones.

Howard Hoffman, Dow Jones' corporate communications director, declined to comment on possible transactions, but said the company is well aware of Ottaway's financial performance.

Ottaway newspapers — eight daily and 15 weekly community media franchises in seven states — contributed nearly 12 percent, or $179 million, of Dow Jones' revenue through the first nine months of this year. Ottaway has 1,300 full-time and 570 part-time employees; the Jackson County operations have just over 200 full- and part-time employees.

The Ottaway family owns 6.2 percent of Dow Jones supervoting Class B shares. Former Ottaway Chairman and Dow Jones board member Jim Ottaway Jr. led an impassioned effort to dissuade the Bancroft family, which controls Dow Jones, from selling the company to News Corp.

"People here are aware that Ottaway is an important part of the company, delivering a significant profit," Hoffman said. "It's relevant to the employees of Dow Jones beyond Ottaway newspapers."

Ottaway bought the Mail Tribune in 1973 and the Ashland Daily Tidings and The Nickel in 2002.

Grady Singletary, publisher of the Southern Oregon Media Group that encompasses the three publications, said the pending sale would not have any immediate impact on operations.

"The Mail Tribune and Ashland Daily Tidings newspapers have served our region for more than a combined 225 years," Singletary said. "Our mission of providing quality news coverage of area communities will not be diminished by a change in ownership. Our staff and management team remain dedicated to providing high-quality journalism as well as advertising in print, online and niche publications."

A national newspaper analyst said leading candidates to buy Ottaway properties include MediaNews Group and Gannett Co. MediaNews owns newspapers in 13 states, including some former Ottaway operations, as well as Northern California dailies in Chico, Eureka and Red Bluff. Gannett publishes USA Today and 85 other dailies, including newspapers in Salem and Reno, Nev.

"The best thing that could happen is Ottaway being taken over by a company devoted to sound journalism as Dow Jones has been," said analyst John Morton, president of Morton Research Inc., in Silver Spring, Md. "The most likely outcome is that some company with a geographic affinity for some of the Ottaway newspapers would buy a paper, perhaps more than one."

In general, it's a buyers' market, he said.

Sacramento-based McClatchy, which acquired the Knight Ridder newspaper group in 2006, won't likely be in the chase, Morton said. Neither would family-owned publishing enterprises in Eugene and Bend be expected to make bids.

"When you look around who owns newspapers not far from (Medford), there are some family-owned newspapers," Morton said. "Not many (publishers) are eager to sink more of the family fortune into the newspaper business right now."

If suitors aren't willing to pony up market value for Ottaway properties, however, News Corp. may well continue operating the chain or parts of it indefinitely.

While metropolitan newspapers have lost circulation, revenue and value, community newspapers have resisted the trend.

"Newspaper values are not down so much in smaller communities, such as those in which Ottaway operates, nearly so much as in big cities," Morton said. "There is less competition in smaller markets. Some big-city newspapers have seen their market values drop by more than half as we've seen in Minneapolis or with The New York Times and Boston Globe."

He said Internet competition hit major market newspapers quicker than outlying areas.

"Over the years, it will trickle down to smaller markets," Morton said. "But it won't be as significant of a development, because smaller dailies have a stronger grip on their readership than big-city newspapers."

Reach reporter Greg Stiles at 776-4463 or e-mail

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