All Seven Papers to Be Sold by the End of the Year.
In a press release that shook the alternative newspaper business, billionaire Leonard N. Stern, owner of Stern Publishing, announced yesterday that he is seeking the sale of all of the company’s weekly newspapers: LA Weekly, OC Weekly, City Pages, Seattle Weekly, Long Island Voice, Cleveland Free Times, and the progenitor of alternative weeklies, The Village Voice. “Since purchasing The Village Voice from Rupert Murdoch fourteen years ago, publishing has been a wonderful and creative business experience for me,” said Stern. “In that time, we have grown from a single publication to become the preeminent alternative newspaper company in the country, with seven highly recognizable brand name publications, each of which is the #1 alternative newspaper, with growing circulation, in its respective market. I am extremely proud of this company, and confident of its future potential. However, after consulting with my children and discussing their future career plans, I have decided to sell our publishing interests.”
In addition to publishing, Stern’s business ventures include real estate and Hartz Mountain pet products.
To broker the sale, Stern has engaged the investment-banking firm of Veronis, Suhler & Associates Inc., an independent merchant bank specializing in the media and publishing industries. Stern’s weeklies — with a combined total circulation of over 890,000 and more than 500 employees — have grown rapidly over the last five years. With revenues exceeding $80 million and cash cows in New York and Los Angeles, Stern’s publishing empire will no doubt be an attractive purchase for the handful of media companies that can afford it.
“The considerable contributions of Stern Publishing to the seven weekly newspapers under its umbrella have resulted in a highly profitable enterprise with significant opportunities for growth,” Stern President David Schneiderman said in the prepared release. “Thanks to this strong partnership, this important group of alternative newsweeklies is well-run, in excellent financial and operating condition, and each newspaper is well-positioned for continued growth and a robust future.”
Robert J. Broadwater, a managing director at Veronis, Suhler, would not comment to the Associated Press on potential buyers or an asking price but said Stern might be willing to sell the papers individually if necessary.
In an internal memo obtained by AAN News, Schneiderman admitted to his staff that the sale of the company is ultimately bittersweet: “Personally, I have mixed feelings about this decision. I have worked closely with Leonard for fourteen years, and had expected to work for him another fourteen years as we continued to build Stern Publishing. He has been both supportive and extremely creative about guiding the business. And yet, I understand and respect the reasons for his decision. And, once I absorbed the news and started working with the investment bankers on the proposed sale, I became very excited about our future… .The company is extremely attractive and we expect a considerable number of qualified suitors.” In the memo, Schneiderman also discloses Stern Publishing’s plans to expand into other markets, including the Internet, television, film, and books.
While he described the details of the sale process, Schneiderman warned his staff that rumors of potential buyers are inevitable: “Beginning today [September 22, 1999], our investment bankers, Veronis, Suhler & Associates, will be receiving calls from interested parties as well as soliciting people we feel would be a good fit for the company. Potential buyers who are serious about their interest and have the wherewithal for a purchase, will be invited to enter a bid. That part of the process will take about 3-4 weeks. Leonard Stern will then consider the bids and choose the finalists. They will spend about a month examining the company, asking questions and formulating their final offer. We expect to be able to announce a transaction by the end of the year with a closing set for January, 2000. In the meantime, it is essential that we conduct business as usual. Though this is a significant event, it should have no impact on our day to day operations.I am extremely confident of our future and am excited about telling our story to prospective owners.”
Michael Sigman, publisher of LA Weekly and OC Weekly, says that while the world is waiting to see who will buy the company, “We just don’t know what’s going to happen. In the meantime, it’s just business as usual. We’re moving forward in a lot of fronts, and it’s just going to continue. So are the other papers. The model of our company is a lot of autonomy. The papers are going to just continue doing what they’re doing.” Despite the uncertainty of the company’s future owner, Sigman is looking forward to the next era of Stern Publishing: “I think it’s very exciting. I love working with Stern; it’s been by far the best working experience of my career. At the same time, I’m very excited about the possibilities for the future.”
