The Gannett Co. Inc., already the largest newspaper chain in the nation with 80 daily newspaper, last night purchased The (Nashville) Tennessean, one of the oldest papers in the South.
Gannett Chairman Allen Neuharth confirmed in a telephone interview from Nashville that talks had been going on for several weeks.
Sources at the Tennessean, said that Gannett paid approximately $50 million for the morning newspaper, and that part of the complex deal involved the sale by Gannett of the Nashville Banner, the city's afternoon paper, to a local group headed by attorney and politician John J. Hooker for $25 million.
Gannett had to sell the lesser circulated afternoon paper in order to buy the Tennessean because of antitrust issues that could be raised if it owned both the newspapers in Nashville.
Neuharth spoke to the staff of the Tennessean after the contract was signed last night, promising the paper "complete autonomy." He said the deal would become effective in 30 to 45 days.
Gannett completed the largest communications merger in history just one month ago, buying Combined Communications Corp. of Arizonia, with two large newspapers and several broadcast properties, for approximately $370 million in stock.
Serious negotiations with the Tennessean have occurred only since June 7 Neuharth contended. Had there been negotiations before that date, they would have had to be included in Gannett's filings with the Federal Communication Commission seeking approval for the purchase of CCC.
The Tennessean (circulation 130,000 daily and 229,000 Sunday) had long been owned by the Evans family, and its well-known publisher, John Seigenthaler, has been an outspoken opponent of the growth of newspaper chains in the U.S.
Ironically, part of the Gannett deal involves assurances that Seigenthaler will remain in his post and be given a long-term contract as editor, president and publisher of the newspaper.
But in testimony before Congress only a year and a half ago, Seigenthaler said, "Publicly held chains, which dominate great segments of this industry at this time, have stockholders far removed from (concerns about) deadlines or leads . . . or content."
A former top Justice Department official under Robert Kennedy, Seigenthaler, who was testifying in favor of legislation to encourage independent newspaper ownership, warned at that time that the Tennessean soon would be faced with having to be sold because of existing federal tax laws.
The Tennessean and the Banner (circulation 85,000 daily) are corporately and editorially separate, but operate otherwise under a joint printing agreement through a third corporation known as the Newspaper Printing Corp. All noneditorial functions for both papers are performed by employes of that third entity. Under the new agreement, profits for the two papers are divided by a formula allocating 70 percent to the Tennessean and 30 percent to the Banner, sources said.
Gannett had owned the Banner only since the early 1970s. Besides Gannett, the Tennessean had reportedly received offers from Times-Mirros Corp. and Newhouse, but the details of those offers could not be confirmed.
The Tennessean had expected to announce its sale yesterday afternoon, but sources at the paper say last-minute snags in the negotiations, reportedly coming from corporate president Amon Evans, held up the signing until last night.
Hooker, one of Tennessee's most colorful politicians and a three-time unsuccessful candidate for governor, had reportedly been seeking to take over the Banner for some time. A personal friend of Seigenthaler, Hooker recently was embroiled in controversy when he challenged the commutation of sentences of 34 state prisoners by outgoing Democratic Gov. Ray Blanton.