(Disclosure: Chuck Taylor, now retired, worked for the Everett Herald from 2010-22.)
On Jan. 15, the Everett Herald posted an oddly un-local story about a company in Canada called Black Press Ltd. Without explaining why it might be relevant, the story said that privately held Black Press, a newspaper chain, was undergoing an ownership change and had sought creditor protection in the Supreme Court of British Columbia and in U.S. Bankruptcy Court in Delaware.
The Herald story, credited to Black Press itself, didn’t merely “bury the lede” as they say in the news business. The lede was completely missing. Arguably, the company’s most prominent holdings are in the U.S. — including the five-day-a-week Everett Herald. Headquartered in Surrey, British Columbia, Black Press is the parent of Everett-based Sound Publishing, which also owns 34 other news outlets in Washington, mostly printed weeklies. Black Press also owns the Honolulu Star-Advertiser in Hawaii, the Juneau Empire in Alaska, and other newspapers in those states. In all, Black Press owns 144 printed or online titles in three U.S. states, two provinces, and two Canadian territories.
For the Herald, one of Washington’s biggest newspapers, the ownership change portends an uncertain future. Thousands of pages of Canadian court filings flesh out much, though not all, of the story. With creditors held at bay for now, family-controlled Black Press intends to sell to two Canadian financial companies and a U.S. newspaper publisher, Carpenter Media Group of Tuscaloosa, Alabama, which owns 28 small papers in Kentucky, Louisiana, Mississippi, North Carolina, Texas, Georgia, Virginia, and Tennessee.
According to court documents, as of a few weeks ago, Black Press had only about $3 million (Canadian) cash on hand, with $61 million of principal and accrued interest outstanding. The court-approved creditor protection in Canada is not called a bankruptcy, but it definitely quacks like a bankruptcy.
If nothing changes between now and the close of the deal on March 15, Canso Investment Counsel, a brokerage in Richmond Hill, Ontario, and Deans Knight Capital Management, a private-equity firm in Vancouver, would control 75% of the new ownership. Carpenter Media would have a 25% stake. Carpenter will run the newspapers in the U.S. and Canada, and the Canadian firms will handle the money and represent the controlling stake.
The new partnership doesn’t seem to have a name yet. And it’s not a done deal. The new owners comprise what’s known in the business world as a “stalking horse,” which sets the minimum bid in an auction. The ownership change is contingent on no one else submitting a higher bid with acceptable terms in coming weeks.
And what would constitute a better offer? Something north of $74.6 million (Canadian), according to a court document. That’s about $55.5 million in U.S. currency. It covers Black’s outstanding debt and other obligations, the cost of doing the deal, and consideration for Black Press’s family-controlled board of directors.
The stalking horse can probably rest easy. Last summer, a broker began shopping the Black Press holdings, together and in pieces, and “engaged with 52 potential purchasers, of which 47 declined to make any offer,” according to the court documents. Of the five parties that did propose deals, “there were no viable options to sell or restructure the [Black Press] companies outside of a formal insolvency process.” Now a formal bidding process is under way. If you think you can make a better offer, you have until Feb. 16.
The intentions of the likely new owners are unknown. There could be closures, spinoffs, divestitures, or layoffs. And there is a potential complication: An Ontario company called Metroland, which owns newspapers there and is a subsidiary of the company that owns the Toronto Star, owns 19.35% of Black Press — and Metroland is not in favor of the deal with Carpenter Media, court papers say.
It’s unclear what that might mean as Black Press reorganizes into something else. Since the announcement, Black Press has declined to comment except through issued statements. It has said the sale “will put the company on solid and sustainable financial footing,” enabling it “to continue providing journalism excellence and outstanding advertising solutions.”
Black Press was founded almost 50 years ago by David Black, now of Victoria, British Columbia. At the time he had been working for the Toronto Star as a business-side executive. According to a lively account by Tyler Olsen, managing editor of the Fraser Valley Current, David Black bought The Williams Lake Tribune from his father, a Vancouver advertising exec. Over the years, Black acquired more and more community newspapers, either individually or through acquisition of other ownership groups.
David Black retired just recently, passing leadership of the company to his son, Alan Black. One acquisition along the way didn’t go so well, and it left Black Press in a hole from which it could not recover. In 2006, the company purchased the Akron Beacon Journal in Ohio from the giant McClatchy newspaper chain for $165 million. Ten years later Black sold the paper for $16 million. That loss was bad enough, but Black Press also was unable to offload a sizable pension obligation, which it carries to this day. Without that big obligation, Black Press might be a going concern.
Today Black Press owns 102 local publications in Canada (all but one of which are weeklies or semi-weeklies), 35 titles in Washington (nine of which are digital-only), four daily publications in Hawaii and three in Alaska. The company also owns printing plants, including a new one in Lakewood, near Tacoma. In Washington, the combined print circulation of Sound Publishing newspapers is 189,195 and employment is 234 people.
The Everett Herald is the biggest of Black’s publications in Washington and is the foremost news source in Snohomish County, population 840,079. According to the court documents, weekday circulation is 21,173 and on Saturdays it’s 24,556. The paper also has digital-only subscribers in the single-digit thousands. The news staff is about two dozen journalists — more than most papers its size — and the Herald has for decades served as an important feeder of journalism talent to its biggest competitor, The Seattle Times. With ownership in flux during a nationwide demise of local news outlets, the fate of the venerable Herald is worthy of concern.
Black Press subsidiary Sound Publishing also has two other dailies in the state — the Peninsula Daily News in Port Angeles and the Aberdeen Daily World. But the vast majority of Black Press publications in the Sound Publishing family are small-town weeklies in the major suburbs of Seattle, including Mercer Island, Renton, Kent, Federal Way, and Auburn, and on Bainbridge Island, Whidbey Island, Vashon Island, and the San Juan Islands.
Sound Publishing also owns Seattle Weekly, though since 2019 it has been only a website that hosts stories from other Sound Publishing titles in King County. Similarly, there are news websites for Bellevue, Kirkland, Bothell, and Issaquah whose print editions have been retired. Their local news coverage is now scant.
Black Press started building the Sound Publishing subsidiary in 1987, when it bought three newspapers on Whidbey Island. By 2013, when it bought the Everett Herald from the Washington Post Co. for an undisclosed sum, Sound already owned numerous small newspapers in Washington. The Herald was a western outlier among the Post Co.’s holdings, and that company was offloading media properties outside D.C. in preparation for selling the mother ship to Amazon founder Jeff Bezos.
When Sound Publishing executives introduced themselves to the Everett Herald staff, they professed a strong belief in the future of print, which many in the newsroom found puzzling. Even 10 years ago it was clear the end was near for inked news as a business model, and Black Press publications had a weak web presence. Indeed, according to Olsen, the Fraser Valley Current editor, Black Press was just then starting to realize the threat of impactful online journalism after a web competitor aggressively covered wildfires in Kelowna, one of the British Columbia communities Black Press served.
Black Press and Sound Publishing eventually improved the publications’ websites, and today many of them are paywalled to tap subscription revenue, including that of the Everett Herald. In 2022, newsroom employees of the Herald voted to unionize, and they’re still waiting for a contract. Kaitlin Gillespie, executive officer of Pacific Northwest Newspaper Guild, says the union made a wage proposal months ago and it was dismissed. There has been no counter offer. Now, “until a sale is finalized in March, we don’t really have a good picture of what the new owners are going to do, or what changes they are going to make.”
While it is the leading news organization in small communities of British Columbia and on the fringes of Seattle, the influence of Black Press is probably greatest in Hawaii. The impact of a sale there, where the company dominates the print marketplace, would be enormous. Black bought the state’s largest newspaper, the Honolulu Star-Advertiser, more than two decades ago and also owns the two main papers on Hawaii Island, the paper on Kauai, and an Oahu weekly called Midweek.
The Star-Advertiser has struggled for years and suffered several rounds of layoffs. According to the Pacific Media Workers Guild, roughly 40 union members remain at the paper, compared to about 65 in 2020. Kevin Knodell, a Star-Advertiser reporter who is the guild’s unit chair, said the company laid off four newsroom workers just days before the announcement of creditor protection.
Rumors that Black was looking for a Star-Advertiser buyer have floated around the islands for a long time. Back in October, guild members wrote a letter to the paper’s management that mentioned rumors of at least three potential buyers. But Knodell says staff members and the guild were kept completely in the dark about a potential deal involving Mississippi-based Carpenter Media Group. “The sale is not what we’re upset about,” he said. “It’s the complete lack of information.”
Star-Advertiser Publisher Dennis Francis hasn’t communicated with the paper’s workers since the announcement of a potential sale, according to Knodell. “We really just don’t know very much,” he said. But Knodell acknowledged the news could be worse, since many Star-Advertiser staffers feared Black’s properties might be sold to Alden Global Capital, a hedge fund notorious for gutting the newsrooms of the papers it buys.