GATEHOUSE_PURCHASE.JPGBILL GAITHER/The Register-Mail

Register-Mail publisher Don Cooper explains to company employees how the GateHouse Media Inc. purchase of Copley newspapers came about during a newsroom meeting today. The announcement of the $380 million purchase came after Tuesday's stock market close.

GateHouse buys The Register-Mail

Wednesday, March 14, 2007

GALESBURG - The Register-Mail and eight other newspapers were bought Tuesday by GateHouse Media Inc. for $380 million.

The Register-Mail - and its weekly newspaper, The Galva News - has been owned by Copley Press since 1996. Three other Illinois newspapers are included in the purchase - the (Peoria) Journal Star, the (Springfield) State Journal-Register, and the (Lincoln) Courier. GateHouse also bought three Copley-owned newspapers in Ohio. The seven daily newspapers have a combined circulation of 241,060, while two weekly newspapers that are part of the deal have a combined circulation of 34,918.

GateHouse, based in Fairport, N.Y., publishes 74 daily newspapers with a total circulation of 386,000 and 226 weekly newspapers with a paid circulation of about 525,000 and free circulation of 477,000, according to its annual report filed Tuesday with the Securities and Exchange Commission. The newspaper chain also publishes 113 shoppers with a total circulation of about 1.9 million. GateHouse has about 3,200 employees at more than 120 locations in 15 states. The company posted a loss of $1.6 million last year on revenue of $314.9 million.

The State Journal-Register, the Journal Star and the Canton (Ohio) Repository will become three of GateHouse's four largest daily newspapers, along with the Quincy (Mass.) Patriot Ledger.

Before the sale, The Journal-Standard of Freeport was GateHouse's largest Illinois newspaper, with a circulation of about 13,000. In comparison, the Journal Star's circulation is about 70,000, and the State Journal-Register has a daily circulation of about 53,000 and Sunday sales of about 62,000. The Register-Mail's circulation is 14,000.

Scott Champion, co-president of GateHouse and its co-chief operating officer for the Western Region, said he's excited about welcoming the Copley newspapers to the GateHouse family.

"The newspapers will be able to work together to enhance our coverage of west-central and central Illinois," Champion said. "The newspapers will be able to focus on what we do best, covering local news in each of the markets."

As to whether there will be any changes in the number of employees at The Register-Mail, or employees' pay and benefits, Champion said, "That's really preliminary to put anything together on that."

In the Galesburg-Monmouth area, GateHouse owns the Daily Review Atlas in Monmouth, as well as a free weekly, The Paper, in Galesburg. GateHouse also publishes an advertising shopper, Pennysaver, in Monmouth.

Champion said the large number of GateHouse newspapers in this area will enhance the content of all the publications, because the newspapers will be able to share content, making it possible to offer readers coverage of events not available elsewhere.

According to Copley News Service, GateHouse, which went public in October 2006, and Fortress Investment Group, the private equity firm that controls it, have been the subject of several recent articles in business publications.

An article published online Tuesday in Forbes magazine quoted a Goldman Sachs analyst saying GateHouse has outperformed the newspaper industry as a whole because of "the company's focus on small, community newspapers, where results tend not to be as cyclical as in the metro newspaper market."

Business Week last month published an article focused on Fortress Investment Group, which owns 60 percent of GateHouse.

According to the article, given the current state of the newspaper industry, "sinking money into print may seem contrarian, crazy even. But as national chains are broken up and young readers and advertisers flee to the Web, Fortress has spotted an anomaly: There's good money to be made publishing newspapers in small towns and exurbs."

The magazine described GateHouse's news coverage as "hyperlocal."

"Editorially, that means if a fist fight breaks out at the school board meeting, the news goes on the front page," Business Week said.

The sale is expected to close by the end of April.

In a brief meeting this morning in the newsroom of The Register-Mail, Publisher Don Cooper thanked employees for their "hard work" during the sale process.

"I would tell you and I would urge you to keep it up," Cooper said.

Among the questions asked by employees were whether Cooper was optimistic both companies' printing operations here will remain open, if employee pay will be affected and what type of benefits are offered by GateHouse.

"I do not know their pay scale," Cooper said. "And I do not know any of their plans at all."

GateHouse Papers

GateHouse Media Inc. newspapers in central Illinois

Daily newspapers

- Canton Daily Ledger

- Star Courier (Kewanee)

- Macomb Journal

- Daily Review Atlas (Monmouth)

- Pekin Daily Times

Paid weekly newspapers

- Times Record (Aledo)

- Oquawka Current

Free weekly newspapers

- The Paper (Galesburg)

Advertising shoppers

- Henry County Advertiser (Henry County)

- Pennysaver (Monmouth)

- The Tazewell County Shopper (Pekin)

- McDonough County Shopper (Macomb)

- Fulton County Shopper (Fulton County)

- Town Crier (Fulton County)

- Strictly Classified (Fulton County)

- Star Power (Fulton County)

- Select Homes (Fulton County)

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