In its third major newspaper acquisition in 16 months, Gannett Co. Inc., yesterday announced an agreement to purchase The Courier-Journal and The Louisville Times for about $315 million.
Owned by the colorful and sometimes contentious Bingham family since 1918, the Louisville newspapers became the object of an intense rivalry in recent years, with heirs to the fortune feuding over how to manage what had become a prestigious regional newspaper operation.
"It is not easy for me to see the Courier-Journal and Louisville Times pass from my family into other hands," Barry Bingham Sr., chairman of the Courier-Journal and Louisville Times Co., said in a prepared statement.
"Change is an inevitable rule of life, however. I subscribe to the Biblical instruction that there is a time to sow, a time to reap. My distress is mitigated by the character of the owners who will now guide the destinies of our newspapers, The Gannett publishing company and its chief executive officer, Allen Neuharth," Bingham's statement said.
After purchasing The Des Moines Register for about $200 million in January 1985 and The Evening News Association, the parent company of The Detroit News, for $717 million last August, Neuharth said, "It feels like winning the Triple Crown.
"There were three big newspaper races . . . this past year. Naturally, we were pleased that Gannett won them all," Neuharth said. "Fittingly, Louisville is a sparkling jewel in that crown."
The purchase of the Louisville property enhances Gannett's position as one of the largest media companies in the country, with revenue of $2.2 billion in 1985. Gannett, which is based in Rosslyn, is already the nation's largest newspaper group. The company said its daily paid circulation will increase to more than 6 million with the purchase of the Louisville papers.
When the Bingham family announced in January that the paper would go up for sale, many of the big newspaper companies in the country expressed interest. However, when the bids were opened last week, there were fewer than a half dozen offers. The New York Times Co. and Hearst Publications, both companies that had expressed some interest, declined to bid.
Also bidding were The Washington Post Co. and The Tribune Co. of Chicago. In Louisville, after word got out that Washington Redskins owner Jack Kent Cooke had also offered to buy the paper, the executive editor, Paul Janensch, told the staff that Cooke was "not the winning bidder."
John Morton, a communications analyst with Lynch Jones and Ryan in Washington, said that his analysis showed that the Louisville papers were worth from $150 million to $200 million. "But, let's face it, some of these newspaper properties are not going for what they're worth, but what people will pay for them," Morton said.
"They paid roughly three times the revenues, which is a pretty high multiple for a big-city paper in a static market," he said of Gannett. However, he said that Gannett had shown in the past that the company knows how to increase profit margins.