The deal will add Community Newspaper Holdings’ 110 newspapers and other publications to Raycom’s portfolio, less seven it has to sell to comply with media ownership rules. Raycom and CNH are principally owned by Alabama state pension fund and based in Montgomery. "There are general administrative costs we can take out of the business,” while taking advantage of content sharing and sales opportunities, says Raycom CEO Pat LaPlatney.
Raycom Sees Synergies In Newspapers Buy
Bucking a decade-long trend in which media companies have been breaking up their broadcasting and newspaper holdings, Raycom Media is merging with small-market newspaper publisher Community Newspaper Holdings, it was announced this morning.
Like Raycom, CNH is principally owned by the Retirement Systems of Alabama and based in Montgomery.
Terms were not disclosed.
Raycom owns or operates 65 TV and two radio stations covering 44 markets in 20 states. CNHI owns more than 110 newspapers, websites and niche publications in 22 states.
Raycom CEO Pat LaPlatney told TVNewsCheck that the merger is more about administrative synergies than operational ones.
“Because both [companies] are located in Montgomery, there are general administrative costs we can take out of the business,” LaPlatney said, citing accounting, finance, IT, legal and human resources.
Among the front-office newspaper personnel who will be sticking around is CNH CEO Donna Barrett, LaPlatney said. She will continue to run the newspapers, only now it will be as the head of a division reporting to LaPlatney.
LaPlatney said that there will be some operational advantages to the merger. Among other things, Raycom’s digital media hub in Atlanta that has been producing international and national news for the Raycom webistes will now also produce it for the CNH papers, he said.
“Historically, the hub has been text-based group, but going forward it is going to do more video,” he said.
LaPlatney said that he believes the stations and newspapers can help each other by sharing ideas on websites and other local digital services.
“There are also some interesting things we can do on the ad sales side.”
Ironically, LaPlatney said the operational synergy will not extend to the seven markets where Raycom stations and CNH papers overlap.
Because of the ban against common ownership of stations and newspapers in the same market, Raycom will be forced to sell the CNH papers in the overlap markets.
LaPlatney said that he will do so reluctantly. “That rule should have gone by the wayside years ago. But we are going to comply with the rule as it is currently written.”
LaPlatney also said not to discount the value of the newspapers, which have well-established local brands and strong news-gathering and sales organizations.
“If you can acquire an asset at the right price, and you have structure in which to deposit them, they can be good deal.
“This is an investment in the future of small-market local journalism.”