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King County Journal up for sale
Seattle Times staff reporter
Capitulating to years of circulation declines and financial losses, the owner of the Kent-based King County Journal announced Monday it is putting the suburban daily and several affiliated regional papers up for sale.
Peter Horvitz, president and chief executive of Horvitz Newspapers, said the Journal has lost money for the last eight years, and his family-controlled company doesn't have the resources to turn it around.
"Another company with the resources to invest could really make this a very successful business," he said. "A buyer that has the resources can be more patient."
Horvitz said he hopes to conclude the sale by the end of the year. But several industry observers said the company may have trouble finding a buyer.
"The fact that it's unprofitable makes it a fairly tough sale," said John Morton, a newspaper analyst who heads a Maryland consulting firm.
"There are not many people getting into competitive situations in metro markets," said University of Washington journalism professor Doug Underwood.
Horvitz said he's confident he will find a buyer. If that doesn't happen, he said, he will keep the Journal and initiate changes aimed at making it profitable on his timetable and within his resources.
For sale: King County Journal newspapers
King County Journal
Mercer Island Reporter
Snoqualmie Valley Record
Covington/Maple Valley Reporter
He wouldn't elaborate but said closing the paper is "very unlikely."
In addition to the Journal, Horvitz is selling two weeklies, the Mercer Island Reporter and Snoqualmie Valley Record, and seven papers in suburban King County that are distributed by mail twice each month.
The company said it will keep its two other dailies, the Peninsula Daily News of Port Angeles and The Daily Times of Maryville, Tenn.
The 343 employees of the newspapers to be sold were told of Horvitz's decision at staff meetings Monday. Carole Beers, a columnist for the King County Journal, said workers were saddened but not surprised.
The Horvitz family, which owned several small dailies in Ohio and New York until 1987, entered the Northwest newspaper scene in 1994, buying the (Bellevue) Journal-American and Valley Daily News of Kent from Persis Media. In 1993, the combined weekday circulation of the two papers was 67,000.
Under Horvitz, the papers changed names then merged in a cost-cutting move to become the King County Journal in 2002. The paper's latest reported weekday circulation was 41,510.
The Journal battles for suburban readers and advertisers with both Seattle dailies. The Seattle Times maintains big circulation leads over the Journal in almost all Eastside and South King County communities, and the Seattle Post-Intelligencer also has a significant presence.
In 1999, after The Times announced it would switch from afternoon to morning publication to compete head-on with the P-I and Horvitz's papers, Horvitz told a reporter that "our situation ... is the toughest newspaper situation one could face."
In recent years the Journal laid off staff and sold its Bellevue headquarters. Liz Brown of the Pacific Northwest Newspaper Guild, which represents 25 news and advertising workers at the Journal's Bellevue office, said wages have been frozen for three years, and managers last fall were asked to take pay cuts of 5 percent or more.
Horvitz said his local non-daily papers and commercial-printing business make money. "The problem is and always has been the King County Journal," he said.
Horvitz said he has no potential buyers in mind. Possible suitors include:
• The Seattle Times Co. Anacortes newspaper consultant David Martens and Larry Grimes, president of a Maryland company that specializes in newspaper mergers and acquisitions, said that buying the Journal could help The Times build a "cluster" of newspapers appealing to advertisers.
But Times spokeswoman Jill Mackie all but ruled that out, saying other matters take precedence, such as the company's legal struggle with The Hearst Corp., owner of the P-I, over the future of their joint-operating agreement (JOA). "It isn't a flat no," she said, "but it seems unlikely."
• Hearst, which would have no presses on which to print the P-I if it loses the JOA battle. The Journal's Kent presses are just four years old, and Horvitz said that while they aren't big enough to print the P-I now, "it's a hell of a start."
"What if Hearst bought it?" Brown asked. "Would that allow the P-I to survive?"
Analyst Morton said Hearst isn't interested in printing the P-I on its own. A Hearst spokesman declined comment.
• The McClatchy Co. of Sacramento, Calif., which owns The (Tacoma) News Tribune and, through its pending acquisition of Knight Ridder, soon will acquire The (Olympia) Daily Olympian, Bellingham Herald and a 49.5 percent stake in The Seattle Times Co.
But Morton said purchase of the Journal could raise antitrust concerns. And Grimes said McClatchy generally avoids competitive markets.
A McClatchy spokeswoman declined comment.
• Black Press of Victoria, B.C., which owns the Honolulu Star-Bulletin and more than a dozen non-daily newspapers in the Puget Sound area, and recently agreed to buy the Akron (Ohio) Beacon Journal for $165 million. It is led by CEO David Black. "He seems to not shy away from papers that aren't doing well," Morton said.
Black did not return a call seeking comment
Horvitz, who lives in Kirkland, is active in Eastside civic and cultural affairs. He said he plans to remain in the area.
Eric Pryne: 206-464-2231 or email@example.com
Copyright © 2006 The Seattle Times Company