Fortress Buys 33 Publications from News Corp.
In connection with the deal, the manager of the publications, GateHouse, will file a prepackaged Chapter 11 bankruptcy plan
Reflecting several changes in the evolving media landscape, including a shift from print and the quest to procure local advertisers, News Corp. has sold 33 print and online publications to an affiliate of Fortress Investment Group LLC (NYSE: FIG).
Fortress, through an affiliate, is buying the Dow Jones Local Media Group, which operates 33 publications, for $87 million.
The publications include the Time Herald-Record, Cape Cod Times, the Record, The Standard-Times, the Pocono Record, the Herald, the Mail Tribune, and the Daily Tidings. Most of the publications are located in New England, with a few in Oregon. The group also includes other print and digital media.
News Corp. CEO Robert Thomson says the properties were not strategically consistent with “the emerging portfolio of the new news.”
New York-based Fortress made the acquisition through its affiliate, Newcastle Investments Corp. (NYSE: NCT).
Newcastle made a $54 million equity investment and financed $33 million of the deal.
Fortress, an investment management firm, has about $54.6 billion in assets under management.
Newcastle, also headquartered in New York, primarily manages real estate assets but also invests in debt.
The publications will be managed by GateHouse Media Inc., based in Fairport, N.Y., publishes about 400 local print and online newspapers in the U.S.
Newcastle owns about 52 percent of GateHouse’s $1.2 billion in debt, and has entered into an agreement with other GateHouse creditors for a prepackaged reorganization plan that would be implemented through a Chapter 11 bankruptcy filing. Newcastle expects to convert its debt into an equity interest in GateHouse.
For more on media mergers, see "Broadcasting Stations Beckon Buyers."
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