EO Media Group was the high bidder at an auction Monday for The Bulletin and Redmond Spokesman, offering $3.65 million for Central Oregon’s century-old daily newspaper and a sister weekly.
EO Media, or East Oregonian Publishing, outbid Adams Publishing Group in the auction at the offices of Tonkon Torp LLP in Portland, said Michael Fletcher, attorney for The Bulletin’s parent company, Western Communications. A previous bidder, Rhode Island Suburban Newspapers Inc., did not participate in the auction, he said. Judge Trish Brown in U.S. Bankruptcy Court for the District of Oregon approved the sale, which is expected to close at the end of August.
With about $30 million in debt, Western Communications filed for Chapter 11 bankruptcy protection in January. It was the company’s second trip to bankruptcy court since 2012, driven by debt from its headquarters building on Chandler Avenue that was built in 2000.
“This offers the papers a chance for a fresh start,” said Heidi Wright, chief operating officer of EO Media Group, based in Salem.
EO Media will be the majority owner of a new holding company, Central Oregon Media Group, for The Bulletin and Redmond Spokesman, Wright said. A group of Bend investors who contributed capital will have a minority stake. Terms of their agreement with EO Media prevent the local investors from exercising editorial control, Wright said.
One of the investors is The Bend Foundation, which made a six-figure loan to support EO Media Group’s bid, said Mike Hollern, chairman of Brooks Resources and a trustee of the foundation. “We believe having a strong local newspaper is a critical part of a democracy,” he said.
The charitable foundation was formed by Brooks-Scanlon Lumber Co., predecessor to the land development firm Brooks Resources, for the benefit of injured loggers and mill workers.
Wright and Hollern declined to identify the other local investors who backed EO Media Group’s bid. Part-time Bend resident Louis Capozzi, a former public relations executive, said he is one of the investors but declined to state the amount of his investment. He said he encouraged Wright to seek others because he wanted to see an Oregon company prevail. “I’m a very small part of the whole thing, but I’m pleased to be part of it.”
EO Media Group is a family-owned company that has been publishing newspapers since 1908. CEO Steve Forrester and Kathryn Brown, EO Media board member and publisher of The Other Oregon magazine, attended the bankruptcy proceedings Monday. The company is in its fourth generation of family ownership.
“We had no debt going into this auction,” Wright said. “We’re financially sound.”
The sale of The Bulletin will mark the end of an era that began in 1953 when Robert Chandler bought the newspaper from Robert Sawyer with a down payment of $6,000. A World War II veteran and Stanford University graduate, Chandler became known as a sharp, conservative editorial writer. He was chairman of the company until his death in 1996. He was succeeded by his daughter, Betsy McCool.
“It’s sad to see what happened to the newspaper industry and how it affected everybody in this country,” McCool said. Investing in local news is one of the reasons Western Communications ended up in bankruptcy, she said. “We protected that newsroom for years. It was important to us.”
McCool said she was rooting for EO Media Group to come out ahead at the auction, noting that she has known the family owners since she was a child. “They seem like compassionate people that care about Oregon,” she said.
As the first bidder offering $2.25 million, Rhode Island Suburban Newspapers is eligible to receive a $67,500 breakup fee, according to an agreement associated with that bid. The fee is to be paid by the winning bidder. “They’re the ones who did the initial work to make sure this was a real deal,” Brown said. She set Aug. 12 as the deadline for filing objections to the breakup fee.
Wright said she does not expect to make wholesale changes in the print product. One lingering question is what EO Media Group will do with Western Communications’ press at the Bend headquarters.
EO Media is not acquiring the real estate at 1777 SW Chandler Ave. Terms of a lease for space inside the building require the press to be relocated within 90 days of the building’s sale, Wright said. The building is being marketed separately.
Western Communications’ other newspapers — The Del Norte Triplicate in Crescent City, California; Curry Coastal Pilot in Brookings; The Union Democrat in Sonora, California; The Observer in La Grande; and the Baker City Herald — have already been sold through the bankruptcy proceedings.
EO Media Group was also the buyer of The Observer and Baker City Herald. The company owns four other newspapers east of the Cascade Range in Oregon.
“We see the ability to do more effective coverage,” Wright said.
The Bulletin’s daily circulation averages 16,865, and the Spokesman’s is 2,000.
Bendbulletin.com claims more than 1.2 million page views from 420,000 unique monthly visitors.
The Bulletin and Spokesman employ 117 people.
— Reporter: 541-617-7860, email@example.com