Cox to sell Austin American-Statesman

NEW YORK - Cox Enterprises Inc. plans to sell its Austin, Texas, newspaper and several other smaller papers, reducing the company's portfolio of advertising-supported media properties.

Cox, a privately held company based in Atlanta, said Wednesday it will use proceeds from the sales to pay down debt.

Cox intends to sell the Austin American-Statesman and five other community papers in Texas, including the Waco Tribune-Herald; three papers in North Carolina, including the Rocky Mount Telegram; and two in Colorado.The other papers in Texas are the Longview News-Journal, The Lufkin Daily News, The Daily Sentinel in Nacogdoches and the Marshall News Messenger.

The company will also sell its Valpak direct coupon mailing business. It did not say how much it expects to fetch for the properties.

The news comes the same day Tribune Co., one of the largest publishers in the country, took a $3.8 billion charge to write down the value of its newspaper brands. A day earlier, E.W. Scripps Co. took an $874 million charge for the same reason.

Newspapers revenues have declined sharply in the past few years as advertisers shift spending online. Investor sentiment toward newspapers has been slumping badly, and several would-be sellers of newspapers have had difficulty getting deals done.

"Looks like the newspaper people are bailing out," said Edward Atorino, an industry analyst at The Benchmark Company.

"But there are still people out there like billionaires and local businessmen who like the business and will be interested - at the right price," Atorino said.

Recent acquisition activity reveals a mix of interest for newspapers. Tribune had three suitors lined up when it put Long Island daily Newsday on the block two months ago.

Cable operator Cablevision Systems Corp. wound up getting the paper, prevailing over Rupert Murdoch's News Corp. and Mort Zuckerman, a real estate magnate who owns the New York Daily News.

News Corp. had planned to sell the Ottaway group of community newspapers which it acquired along with its purchase last year of Dow Jones & Co., but no deal materialized and News Corp. took them off the market in July.

Sun-Times Media Group Inc., which publishes the Chicago Sun-Times, has been trying to sell that paper for more than six months. It reiterated last week that is was still seeking a buyer.

Just last week, Hearst Corp. purchased the Connecticut Post in Bridgeport and seven weekly newspapers in the state from MediaNews Group Inc. for $155 million.

Atorino said Gannett Co., the largest owner of U.S. newspapers, had cash to make acqusitions, but questioned whether it would be interested in expanding its reach when the industry is in decline.

After the sales, Cox Newspapers will still operate The Atlanta Journal-Constitution, the nation's 20th largest paper by circulation, along with The Palm Beach Post in Florida and the Dayton Daily News in Ohio.

"This decision was made as part of an ongoing strategic review of our portfolio and enables us to maintain our strong and stable financial performance by further paying down debt," Chief Executive Jim Kennedy said in a statement.

Cox said it now generates about 80 percent of its $15 billion in annual revenues from sources outside advertising-supported media businesses such as newspaper, television and radio.

Those businesses have seen sharp declines in advertising revenue in recent years as advertisers shift spending online, where consumers are increasingly getting their information.

Cox also owns a cable TV company called Cox Communications Inc., an auto auction and services company called Manheim Inc. and Cox Auto Trader, which runs auto publications and has a majority stake in AutoTrader.com.

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