William Dean Singleton, the 36-year-old Texan who has created a burgeoning newspaper chain by gambling on papers that others have given up on, yesterday announced another acquisition -- The Denver Post.
Singleton said that Times Mirror Co. has agreed to sell The Denver Post to an affiliate of MediaNews Group Inc., owned by Singleton and Richard B. Scudder, for $95 million.
The sale represents the third metropolitan paper in an oil depressed area that Singleton has decided to tackle in the last year. Last year Singleton and associates bought the Dallas Times Herald from Times Mirror for $110 million. Last week he announced plans to pay $150 million for The Houston Post, owned by the Toronto Sun Publishing Corp.
For Times Mirror, the sale of a second paper to Singleton this year indicates that the company that publishes the Los Angeles Times, Newsday and the Baltimore Sun, among others, has decided to stay out of intensely competitive newspaper markets.
"Although we would certainly be interested in acquiring new newspapers, I don't think we'd be interested in the kind of competitive situations like Dallas and Denver," said Times Mirror chairman and chief executive officer Robert F. Erburu.
Erburu said that the Post had experienced "significant financial losses in recent years" as a result of the prolonged economic slump in the Denver area.
Singleton, however, has predicted that he can make the Post profitable within a year, hoping to repeat his performance in Dallas where newspaper sources said he has made the Times Herald profitable since purchasing it from Times Mirror. One source said Singleton had scaled back costs by $20 million in Dallas and is expecting to make $10 million or more by the end of this fiscal year.
Still, for second papers in these cities to fare well, Singleton needs the economies in Dallas, Houston and Denver to revive dramatically after several years of suffering from the slide in the oil industry.
"A lot depends on what happens in the energy economies," said media analyst John Morton said yesterday. "He's banking on the economy coming back in those three communities, and they are starting to show some very small improvements. But if that doesn't happen, he's going to have a bear by the tail."
With the purchase of the Denver Post, which could be completed on Dec.1, Singleton will own 28 daily newspapers and 28 non-dailies -- aking his group among the top 10 nationally in number of dailies owned by a newspaper company.
Singleton said the purchase price for the newspaper would be $95 million in cash and notes. Morton estimated that the notes comprise such a large portion of the price that the the present cash value of the transaction would be about $70 million.
Singleton told some of those interviewing him yesterday that so-called junk bonds would not be used to finance the purchases. But one source said that although no agreement had been signed, there are indications that Singleton's firm is likely to finance both the Denver and Houston purchases through a combination of bank loans and high-yeilding "junk bonds" issued through Drexel Burnham Lambert Inc.
Under the Denver agreement, Times Mirror will retain ownership of the Post's downtown land and buildings -- worth an estimated $20 million. However, the sale includes a production facility completed last year on 45 acres near the city.
Morton and other media analysts looking at this sale said that the price seemed low, considering that Singleton is getting a new printing plant. "The value of that (plant) could be very close to what he's getting," Morton said of Singleton, "He's basically being able to buy this for the physical assets."
The newspaper is being purchased by a newly formed MediaNews Group affiliate owned by Singleton and Scudder. Media General Inc., of Richmond, will also be a financial participant in the transaction and will have a future right to acquire a 40 per cent interest in The Post.
Although Singleton has come into other newspapers and slashed the staff as part of his cost-cutting, he has told editors and others at the Denver paper that such cuts will not be necessary.
The Denver Post asked staff members to take voluntary early retirement earlier this year and the news staff is down to about 185, according to Post editor David Hall. Singleton told editors and others that he would like to gradually increase the staff to about 250.
David Burgin, editor of The Dallas Times Herald, said that Singleton had no plans to trim the staff in Denver or Houston "because it's already been done.
Staff Writer David A. Vise contributed to this story.