Cecil Whig, Shore Newspapers Sold; Mystery Surrounds Eclectic Family with Camping, Wine Interests– to Dabble in News
The Cecil Whig is being sold by a Texas-based media company, which was owned primarily by foreign banks and investors, to a multi-state US family-led operation with no news background but a financially profitable string of businesses tied to recreational vehicles and a multi-millionaire with eclectic interests in French vineyards and music education.
The announcement of the sale came in a conference call to local employees of the Whig and other area newspapers (including the Newark, DE Post, the Easton Star-Democrat and the Kent County News in Maryland) Thursday afternoon, sources said, with David Fike, president and publisher of the Chesapeake Publishing Group division of American Consolidated Media of Austin, TX. (Cecil Times has called Fike for comment on the sale and will update this report upon his response.)
The ACM operation acquired Chesapeake Publishing Corp., longtime owners of the Whig and other Eastern Shore newspapers, in 2007 in a highly-leveraged buyout deal by an Australian-based media company through a US subsidiary. But the deal went sour before too long and a cadre of banks, lenders and moneymen called in the debts and took over. Required statements of ownership published in the Whig have listed General Electric Capital Corp., followed by Australia and New Zealand Banking Group, and the Royal Bank of Canada as the principal owners.
Now the Whig and other area newspapers—along with several other ACM divisions owning small newspapers and advertising–laden “shopper” publications in Minnesota, Ohio and Wisconsin—are being acquired by Adams Publishing Group, LLC, according to the Whig’s front-page report published on Friday. To its credit, the Whig at least re-wrote the official press release a bit, unlike other newspapers involved in the sale that published a verbatim announcement including the hard news lede, “We are proud to announce…”
Unusual in such a transaction is the total absence of any comment by the purchaser—only comments from regional executives of the sellers, ACM, were included in the local newspapers’ published reports. And that’s just an inkling of the news blackout surrounding the deal and its principals. A short release was sent to the Associated Press in several states where the purchased publications are located but there were no detailed releases to business publications as is the norm in a multi-state transaction. The ACM website was also silent on the deal.
Cecil Times has combed through Securities and Exchange Commission filings and followed a trail of linked business entities and financial reports to find an interesting tale of a driven businessman with an eye for cornering the market on a business niche, a penchant for fine wine and a unique perspective on philanthropy. But not a trace of newspaper expertise or understanding of the public trust that a news organization is in the community it serves.
The “new” Whig will be owned by “APG Media of Chesapeake, LLC,” a limited liability corporation that was formed in Delaware about two weeks ago, on 2/24/14, state records show. At the same time, three other LLCs were created in Delaware to own other newspapers and shoppers being acquired from ACM: APG Media Ohio, APG Media Wisconsin, and APG Media Minnesota.
The official announcement published in the acquired newspapers listed a Minneapolis dateline and the new Adams Publishing Group was said to be based in that state. However, no such entity is listed in telephone or business directories.
The official announcement also described the new owners as having “holdings” in radio stations, trade shows and “outdoor advertising” businesses. Employees were advised that the new owners have ties to the recreational vehicle industry.
Filings with the SEC and other documents indicate the new APG operation is tied to Stephen Adams, a multi-millionaire who created a billboard company and acquired a string of recreational vehicle and campground businesses, RV magazines and RV trade show operations. He has operated an umbrella company, Affinity Group, of Ventura, CA, that owned a community bank in California that was subsequently taken over by federal regulators and ultimately acquired by another bank, according to documents of the Federal Deposit Insurance Corp.
He also acquired controlling interests in well-known businesses in the RV industry: Good Sam enterprises, which offers roadside assistance and repair services to RV owners, and Camping World, which sells RVs and Freedom Roads, a campground operator. A 2013 filing with the SEC lists Good Sam as the chief operating entity with Camping World as a wholly owned subsidiary. The filing also lists significant $327.3 million in debt on the books.
Other filings note that in March, 2013 Good Sam sold its “outdoor powersports” magazines to EPG Media, LLC which was identified as controlled by Mark Adams, the son of Good Sam chairman Stephen Adams. EPG Media, which was formed in Delaware on 1/29/13, state records show, lists an address in Minneapolis but its phone number connects to Good Sam headquarters in California. Cecil Times left a message for Mark Adams at the headquarters, seeking comment on plans for the newly acquired newspapers, and will update this report upon his response.
Mark Adams is believed to be the planned operator of the newly acquired newspapers. His father, Stephen, told a Yale University alumni publication in 2008 that he has Parkinson’s disease and had to scale back some of his activities, including piano lessons he began late in life. http://www.yalealumnimagazine.com/articles/2247
Stephen Adams, a 1959 graduate of Yale, gave one of the largest donations in the university’s history when he and his wife contributed $100 million to the music school so that students could attend tuition-free. He said at the time that his family foundation focuses its charitable efforts on education, especially in the arts and music.
Adams also has an appreciation of fine wines, which he turned into winery businesses in California and France, where he has acquired old chateaux and re-built vineyards to restore them to their former glory. [ http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aTMvN1DAX8L8 ]
[UPDATE: Politically, Adams arranged through his billboard operations for $1 million in billboard ads supporting the election of George W. Bush for President, according to reports in the Los Angeles Times and an acknowledgement by Adams in the Yale magazine interview. According to Federal Election Commission records, that agency filed a federal court case against Adams alleging violations of disclosure rules for "independent expenditures" to benefit a federal candidate. After the court refused Adams' motion to dismiss the case, the FEC and Adams reached an out of court settlement of the case.]
Adams received a Masters in Business Administration from Stanford University, and outlined his business philosophy in a 2006 interview with the school’s alumni publication. A telling comment, given the nature of small local newspapers’ niche where they generally face little if any competition, is Adams’ notion of a “franchise” for the type of business he likes for investment:
“…the opportunity should have many of the characteristics of a franchise, namely, protected territory, inelastic demand, un-level playing field, and difficult barriers to entry. It should be more than a commodity but something that has true and continuing franchise value.”
[See article here: https://www.gsb.stanford.edu/news/headlines/2006arbuckleaward.shtml
But the Adams family’s expertise in what the business types like to call vertical marketing and dominance of related niches will be up against the realities of today’s difficult newspaper publishing climate. Since its takeover by ACM, the Whig scaled back from five to three days a week of print publication, while seeking to expand its online presence.
Numerous layoffs and editorial staff cutbacks marked the ACM acquisition, and if the new owners are looking for more cost-cutting, so as to enhance profits and cover their acquisition costs, there is little left to cut without further weakening the actual news content of its publications. Even with only three days a week of print publication, the Whig is but a pale shadow of its former content, in both numbers of articles and depth of coverage. Fill-in-the-blank lists— such as templated Q-and-A features on various job-holders in the county– have become a mainstay.
Being owned by eccentric or visionary millionaires and their families used to be the norm in the newspaper industry, until the wave of newspaper consolidations in the hands of media conglomerates in the 80’s was followed by leveraged buyouts and bottom-line oriented hedge funds a decade or more later. As the troubled newspaper industry flailed about trying to figure out how to hold on in the Internet age, there have been some intriguing signs that some wealthy individuals or groups are looking to acquire newspapers for civic-minded reasons.
The recent acquisition of the Washington Post by Jeff Bezos, the Amazon founder, is being watched with interest throughout the news industry. The Graham family had held majority ownership of the Post Company for generations but since it was a publicly-traded company it was still beholden to stockholders and demands for greater profitability that relied on non-news businesses also owned by the company. So the Post newspaper was spun-off to Bezos, who has said he will not interfere in news content and wants to find a way to ensure financial stability for newspapers to carry out their civic duty in the future.
The Baltimore Sun suffered through the bankruptcy of parent Tribune Co. when a Chicago real estate czar with no news background bought the company in a highly leveraged deal that ultimately saw the company acquired by its debtors. For several years, a group of Baltimore community and business leaders have discussed the possibility of buying The Sun and returning it to local ownership.
For the Whig, the new owners have no discernible local ties, no news background or expertise, and—from their silence so far—little comprehension of the community concerns for the fate of their local news outlet. Unlike Bezos, who was high-profile in his assurances to the Washington community and news staffers that his key priority was quality news and not personal profits—Cecil County is so far left in the dark.