Hollinger International is putting the bulk of its community dailies on the block and reevaluating its metro operations in the latest major newspaper sales activity.
The move follows the newspaper industry's biggest-ever deal -- Tribune Co.'s $8 billion deal for Times Mirror Corp. -- and the sell-off of Canadian publishing giant Thomson Corp.'s Newspapers' more than 125 newspapers. Thomson will keep its Toronto Globe & Mail flagship and concentrate on its business-oriented online operations.
Also, The New York Times Co. is placing seven newspapers on the block, and Journal Register Co. is selling off its Midwestern newspapers. Hearst Corp. this quarter has sold the San Francisco Examiner to Ted Fang, who owns the three-times-a-week San Francisco Independent.
"We're into another wave of consolidation which will continue for some time," says Owen Van Essen, president of newspaper broker Dirks, Van Essen & Murray.
Analyst Steve Barlow of Credit Suisse First Boston likens this trend to the cable industry consolidation trend where "if you weren't big, you had to sell out. There's not as much pressure on newspapers. People are thinking about clustering more so now than they have in the past."
Clustering allows newspapers in the same geographic area to share content, production costs and offer advertising efficiencies.
It's not about divestiture, but about refocusing media operations in an era of convergence, says David Cole, publisher of industry newsletter `NewsInc.'
Lee Enterprises announced in March it would sell its broadcast properties to concentrate on print.
"Lee has decided [it wants] newspapers, not broadcast," says Mr. Cole. "Thomson wants [business-to-business] online media. Tribune decided it wants a mixture of newspapers and TV, but it feels it has the internal bandwidth to manage those disparate businesses."
"I think consolidation, in the next three to five years, will come at a mind-boggling speed," says Dean Singleton, CEO of MediaNews Group. Mr. Singleton outlines his theory: Half of today's newspaper owners see great opportunities in the Internet, while the other half fear it and are pessimistic about its effect on the retail business and classified advertising.
"Those in the first half are in the process of buying the second half," says Mr. Singleton. "We're on the side that thinks the future is more exciting than it has ever been. I hope we're right."