One hundred years ago, David W. Stevick founded News-Gazette Media. Today, it is an owner of an AM radio station with an FM translator; two full-power FM stations; and a collection of print publications that includes the daily newspaper the company takes its name from.
Unfortunately, News-Gazette Media, like many print operations, has been through some lean years of late. As such, in its centennial year, the company has voluntarily sought Chapter 11 bankruptcy protection and is now agreeing to sell all of its assets.
Voluntary petitions for relief under Chapter 11 of Title 11 of the U.S. Code were filed in a Delaware federal bankruptcy court on August 30.
However, an asset purchase agreement reflecting the sale of News-Gazette Media’s assets to Champaign Multimedia Group (CMG) had been drafted and approved by both parties four days earlier, on August 26.
The APA was filed with the FCC late Monday (9/9).
CMG is an affiliate company of Community Media Group, and mainly operates community newspapers and their websites in towns located in Indiana, Illinois, Iowa, Michigan, Pennsylvania and Western New York. In Illinois, CMG’s holdings are comprised of the Hoopeston Chronicle in Hoopeston, Ill., an hour northeast of Urbana; and the Times-Republic of Watseka, Ill., another 15 minutes to the north of Hoopeston.
CMG is led by Larry J. Perrotto, who has served as Chairman since the company’s 1996 founding. He has a publishing background, and from 1994-1996 was President/CEO of the Chicago Sun-Times. But, once the News-Gazette transaction closes (it is expected to occur at 11am Eastern on November 4), Perrotto will also gain ownership of radio stations.
It can do so thanks to FCC rule modernization that came in November 2017, as the Pai Commission moved to end its 42-year-old newspaper/broadcast media cross-ownership rules. News-Gazette had been grandfathered in its ownership of radio and newspaper properties serving Champaign-Urbana, Ill., a market rated by Eastlan Ratings.
In the market, News-Gazette competes against Saga Communications, Neuhoff Broadcasting and SJ Broadcasting.
Now, CMG will take on ownership of the radio stations, comprised of:
- Class A WKIO-FM 107.9, licensed to Arcola, Ill. It airs a Classic Hits format.
- Class C WDWS-AM 1400 and unbuilt FM translator W230CW at 93.9 MHz in Champaign. WDWS is the market’s News/Talk leader, according to Eastlan ratings.
- Class B Adult Contemporary WHMS-FM 97.5, licensed to Champaign.
The deal also sees CMG take ownership of the daily News-Gazette and the Ford County Record, The Rantoul Press, Piatt County Journal-Republican, Mahomet Citizen and The Independent News.
The APA lists the purchased assets CMG will be obtaining in detail, down to the furniture, fixtures and equipment tied to the newspaper operation. Excluded assets include real estate associated with the newspapers, and stock in D.W.S. Inc., the affiliated entity tied to News-Gazette Media.
The purchase price is $4.5 million and assumed liabilities. A 10% “bid deposit” has been made.
What hasn’t been made are real estate taxes on the “radio station fee property.” D.W.S./News-Gazette will make the payment before or at the time of closing, using the escrow funds to make its delinquency disappear. This is the 15 E. Main Street facility, which is not being sold to CMG.
D.W.S. and CMG have agreed to prorate the annual FCC regulatory fees as of the closing date based on the Commission’s fiscal year.
Marajen Stevick Foundation, a non-profit, holds all of the equity of News-Gazette; News-Gazette owns 100% of the equity of D.W.S., explaining the co-ownership as shown in the asset purchase agreement.
John Hecker, president of the foundation, said of the sale, “Our unique model of local, not-for-profit ownership was ideal when it was formed over a decade ago. The economic realities of today’s operating environment, unfortunately, have made it impossible for us to continue as an independent owner. We are extremely happy to have identified a buyer that shares our core values and commitment to quality products.”
News-Gazette Media is led by CEO John Reed. At an all-staff meeting held August 30, he said, “We are pleased to announce that our search for the new owners for our properties has led us to a family-owned company, located right here in Illinois. Community Media Group shares our values and represents everything we had hoped to find in the next steward of our newspapers and radio stations. They have a strong commitment to quality products, and they share our vision of a multimedia future where print, radio and digital media outlets continue to complement one another.”
He added that the ultimate decision to seek a buyer “was extremely difficult on many levels.” But, in the end, Reed expressed the “absolute confidence in our selection of Community Media Group and am convinced that both the decision to sell and the selected buyer represent the best possible outcome for our employees, readers and listeners.”
What will happen to News-Gazette staff. The newspaper reported August 30 that employees were provided with formal notice of a potential layoff planned to occur in the 14-day period beginning Oct. 31. However, CMG has indicated that it is developing plans for the rehire of “numerous” News-Gazette Media employees following the sale, the newspaper said.
Still, the loss of jobs will be felt by many, and Reed addressed this in the August 30 staff meeting.
“It is most certainly regrettable that some employees won’t be rehired during the transition,” he said. “Our economic circumstances — which are not unique to this operation — require that we operate more efficiently. Absent this sale transaction, we would be making similar decisions.”