Owner of Pioneer Press exploring possible sale of company

The owner of the newspaper chain that includes the St. Paul Pioneer Press said Friday that it is considering "strategic alternatives" that include selling part or all of the company.

Digital First Media, based in New York, said it has hired investment bank UBS Securities to help explore options that "may include, but are not limited to, the sale of the company as whole, the sale of one or more regional clusters, or the continued execution of its business plan."

"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," CEO John Paton said in a statement.

Digital First is the nation's second-largest newspaper company by circulation, and operates news and online outlets in 15 states, including 76 daily and Sunday newspapers and 160 weeklies.

New York hedge fund Alden Global Capital is the majority owner of the company, which was formed in December 2013 through the merger of MediaNews Group and the former Journal Register Co. In addition to the Pioneer Press, Digital First's holdings include the San Jose Mercury News and the Denver Post.

A call to the Pioneer Press seeking comment was not returned.

Media analyst Ken Doctor, who has been predicting Digital First's sale on his blog since the spring, said it is unlikely that the company will go in one piece. A more likely scenario is that assets get auctioned off in pieces, based on geographic clusters of properties in California, Colorado, Texas, New Mexico and New England.

"I think either the Pioneer Press gets sold individually, or it doesn't get sold at all," said Doctor, who is a former managing editor of the Pioneer Press.

Doctor predicted that the Pioneer Press will sell for less than $20 million, which could make it appealing to any number of buyers, including Star Tribune owner Glen Taylor.

Asked earlier this summer if he would be interested in the St. Paul paper, Taylor said it is something he would consider. "If they decide to sell it at some time, obviously we would be interested," Taylor said in June. "But I don't have any knowledge of that, or any reason to believe what that timetable might be."

Taylor could not be reached Friday. Star Tribune Publisher Mike Klingensmith declined to comment.

Digital First has been through turmoil in recent years, as the newspaper industry as a whole has faced challenges of declining advertising revenue and circulation. Its predecessor companies endured two bankruptcies, and Alden Global Capital has been working to slash more than $100 million from the budget.

But earlier this year, Digital First shuttered its digital newsroom in New York, known as Project Thunderdome, which for two years had served as a national hub for many of the company's newspapers.

Bernie Lunzer, president of the Newspaper Guild-CWA, which represents more than 3,500 workers at Digital Media operations, said the news of a possible sale did not come as a surprise, as hedge fund owners typically don't operate with a long time horizon.

"It's hard to know if it's another excuse to strip down the assets they don't want and keep the ones they want, or whether the have finally realized they don't have a plan," he said. "It's too bad. Obviously, all of us are looking for a recipe for success."