Correction: An earlier version of this story incorrectly said that the Daily Herald Co. employed 67 people. That number was for reporters, editors and photographers. The total number of employees, including advertising, business and production people, is about 200. This version has been corrected.
The Washington Post Co. has signed an agreement to sell the Everett, Wash., Herald, a daily newspaper it has owned since 1978, to Black Press of Canada and its U.S. subsidiary Sound Publishing for an undisclosed amount.
The sale will include the Herald’s print and online products, although for the time being The Post Co. will retain two pieces of real estate assessed at about $10 million.
Founded in 1975, Black Press is a private chain with more than 170 small community newspapers concentrated in British Columbia, Alberta and Washington state. The company also owns the Honolulu Star-Advertiser and the Akron (Ohio) Beacon Journal, both daily newspapers.
Although most big newspaper companies are contracting, Black Press has expanded. In a 2008 profile of the company’s founder, David Holmes Black, the Seattle Weekly said that about a million households in Washington state would have a paper owned by Black “land in their front yard” or would read one bought at a newsstand.
The Post Co. does not break out separate financial figures for the Herald, although a person familiar with the transaction said the paper has lost modest amounts of money in the past couple of years. Last year, the Audit Bureau of Circulations reported that the Herald’s Sunday circulation increased to 50,795 in March from 49,115 a year earlier, up 3.3 percent. Its weekday circulation dropped by a similar percentage, but the performance was better than most of the country’s major dailies achieved.
“Over the years, as the newspaper business has changed, having it as our sole operation on the West Coast was not sound business strategy,” said Ann McDaniel, a vice president at The Post Co. who helped negotiate the deal. “Sound Publishing and Black Press expressed an interest; we saw an opportunity to preserve the company and most of the jobs, and we decided to move forward with this.”
Shares of The Post Co. rose 1.4 percent to close at $389.19.
McDaniel said that Black Press’s Sound Publishing, with 39 papers in Washington, will consolidate the Herald with other facilities it has in the area.
According to The Post Co.’s most recent annual report, the Daily Herald Co., which employed about 200 people at that time, is also a regional printing site for USA Today. Everett is about 30 miles north of Seattle. The company publishes a weekly community newspaper that is home-delivered in south Snohomish County; La Raza del Noroeste, a weekly Spanish-language newspaper; and the Snohomish County Business Journal, a monthly publication.
In her 1997 memoir, the late Katharine Graham, longtime chairman of The Post Co., wrote that the acquisition of the Herald in 1978 was part of a “larger plan to acquire several smaller newspapers which never materialized.”
She said the Herald was poorly appraised. “We paid a monopoly price for a paper that was in a somewhat competitive situation with Seattle and then proceeded not to run it well until recently, when it has been vastly improved,” she wrote.
Black has said that he may have erred in paying $165 million for the Akron paper in 2006, shortly before the recession. He also drew criticism after buying and closing the Honolulu Advertiser and laying off more than 430 people to bolster his other Honolulu newspaper, now renamed the Star-Advertiser. But a Vancouver Sun profile of him in 2010 said his papers have a combined circulation of 2.8 million and more than $500 million in annual income.
The news follows announcements by The Post Co. that it will also sell two shipping terminals in Old Town Alexandria and consider the sale of its headquarters building in Northwest Washington. Together, the three moves could generate substantial amounts of cash; the headquarters properties in downtown Washington alone are assessed at about $80 million, although the buildings would most likely be torn down by a buyer. McDaniel said the moves were not related, calling them “total coincidence.”
According to the company’s most recent disclosure, The Post Co. had $467.3 million in debt on average in the third quarter of 2012 and paid a 7 percent interest rate. The company had working capital of $373.1 million.
The Post Co. said it expects the Herald sale to close in March.