Tribune Co., publisher of The Chicago Tribune and The New York Daily News, will purchase the Newport News Daily Press and Times-Herald and related businesses for $200 million, the two companies announced yesterday.
The Tidewater newspapers were put up for sale by the Bottom and Van Buren families, which own the controlling interest in the Daily Press company.
The Daily Press publishes the Daily Press and the Times-Herald, which have a combined circulation of 104,000 daily and 112,000 Sunday. The papers' circulation area covers eight counties in the Virginia Peninsula area.
The deal also includes two cable television systems in Newport News and Danville with a total of 60,000 subscribers. Tribune Co. said it plans to sell both systems. The company would not specify what portion of the purchase price was paid for the cable systems.
"These are excellent cable operations. But last year we decided to divest the cable systems Tribune Co. has owned in order to focus resources on our primary businesses," said Stanton R. Cook, Tribune president and CEO. "Our intent to sell the Daily Press systems is consistent with that strategy."
In December, Tribune Co. sold its problem-plagued, money-losing cable system in Montgomery County to Hauser Communications.
In 1985, the Daily Press posted revenue of $52 million, $36 million of which was newspaper revenue.
Analyst Kevin Gruneich of First Boston Corp. said the Daily Press purchase is "one of the largest media bargains of the year," because of the good growth potential of the Newport News market. He estimated the cable systems' price at $85 million and the newspapers' at $115 million, or 13 times the papers' operating cash flow.
According to Bruce Thorp of Morton Research Inc., Tribune's purchase of the Daily Press is "sort of a replacement for the Los Angeles Daily News," which Tribune sold in December to Washington Redskins' owner Jack Kent Cooke for $176 million. At the time of the sale, the Daily News had a daily circulation of 150,000.
Thorp said the Daily Press was "a pretty profitable operation, with a pretax margin on the order of 20 percent, or so."
A Tribune Co. spokesman would not comment on whether the company will continue to operate both the morning and afternoon papers. "They'll have to look at the market and determine what the effect on overall circulation would be if they were to combine operation," said Thorp.
The Daily Press announced it was up for sale in November. Raymond B. Bottom, Daily Press board chairman and vice president, said Tribune Co. was not the only bidder, but wouldn't name other suitors. Gruneich said Tribune's willingness to bid for the newspapers and the cable systems probably gave it the upper hand.
Bottom said he and William R. Van Buren Jr., the company's president and treasurer, will serve as vice chairmen after the acquisition is completed. The Van Burens have been associated with the paper since 1910 and the Bottom family since 1930, the company said.
Tribune Co. also owns the Chicago Cubs baseball team, the New York Daily News, the Orlando Sentinel, the Fort Lauderdale News and Sun-Sentinel, the Escondido Times-Advocate and the Palo Alto Peninsula Times Tribune. Other properties include television stations KTLA in Los Angeles, WGN in Chicago and WPIX in New York.