Voice Papers Sold to Investor Group: Incumbent Team in Control
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In a transaction that leaves its editorial and management team intact, The Village Voice was purchased from owner Leonard Stern by a group of investors led by a New York-based money management firm. The price for the Voice, and Stern's chain of six other weekly papers, including the LA Weekly, was said to be in the range of $150-160 million.The deal was put together by affiliates of Weiss, Peck & Greer, L.L.C., a New York-based investment management firm owned by the Dutch-based Robeco Group. David Schneiderman, the current Voice publisher, has been installed as CEO and equity partner of the new company, a signal that the anti-establishment style of the papers will continue. Schneiderman has already said that Don Forst, Voice editor in chief, can stay on the job "as long as he wants to."Prior to the Voice deal, affiliates of Weiss, Peck & Greer acquired the Tennessee-based weekly the Nashville Scene and made an alliance with Art Howe, a former Philadelphia newspaper executive. The Scene will be part of the new company to be called Village Voice Media, and Howe will be president. Albie Del Favero, publisher of the Scene, and Bruce Dobie, the editor, will also be equity partners, and Del Favero and Mike Sigman, the LA Weekly publisher, will serve as executive vice presidents. The new company will have annualized revenues of approximately $90 million and a combined circulation of 900,000. Other Voice papers are located in Seattle, Minneapolis, Cleveland, Long Island and Orange County, California.There had been some anxiety and hand wringing prior to the purchase for fear that the Voice papers' editorial aggressiveness might get diluted by a new owner. While scuttlebutt about the nature of the purchase had been floating around for weeks, the inclusion of the highly respected Nashville Scene and of Pulitzer prize-winning journalist Howe were two surprise ingredients in the deal and add to the sense that the chain will continue to invest in quality journalism."This is a great scenario," said Dobie. "These papers could have been transmogrified into something bad – a dot com, a CitySearch, a Capital Cities – a company who's main concern was listings and selling concert tickets." The overall package came about through a series of serendipitous events, according to some of the participants. The first step was the Nashville connection. As Dobie explained: "In the present climate in the alternative press, you either decide to buy or be bought." He and his partner Del Favero struck a deal with Weiss, Peck & Greer, where the firm invested in the Scene and the Scene's two owners signed on to a separate holding company to seek additional properties. Secondly, Art Howe had connections to Weiss, Peck & Greer through pals who owned radio stations and had been pushing weeklies as a great investment. Howe then got involved in the Nashville deal.Independently, the Voice went up for sale and Schneiderman made contact with Weiss, Peck & Greer. Over time, the pieces feel into place. Some see Howe as an important catalyst in the process, with his enthusiasm for the investors. "I'm awestruck at the potential here," Howe said. "This is a very good group of newspapers and the Weiss, Peck firm is first rate – the best of the best. They get it." The settling of the Voice ownership situation sets the stage for a new round of potential consolidation in the alternative newspaper industry, as well as growth in the Voice brand. In recent months the Voice has not been active in buying new papers, as Stern had put the chain up for sale, but rival New Times Inc. has continued to expand, adding the 11th paper to its stable with the recent purchase of the Kansas City Pitch Weekly. With new deep pockets and an aggressive team of Howe and Del Favero looking at new properties, the situation is likely to change. Schneiderman told the New York Times that acquiring new papers was his first priority, followed by alliances with Internet companies looking for local news and advertising partnerships. "I want multiple channels of distribution. I want the reporters to feel that you don't have to wait for the publication cycle," he told Felicity Barringer of the Times.Schneiderman added that since two of the investors – Jim Thompson and Mike Craven, owners of Liberty Broadcasting – owned radio stations, he is contemplating partnership arrangements or the purchase of stations.So it's likely the Voice/New Times rivalry will be generating a lot of attention in the near future as the two companies are increasingly competing in the same markets and for national advertising dollars. The two companies have very different styles – New Times has a centralized operation and its papers have a consistent look and editorial make up. Schneiderman's approach, on the other hand, is more laid back, with local editors and publishers enjoying a fair amount of autonomy. "Both approaches have been successful," Dobie points out, "But from an editor's point-of-view the decentralized approach appeals to me."It's anybody's guess as to what role, if any, the money guys will play in shaping the editorial future of the new company. With one investor, the Canadian Bank of Commerce, and with Weiss, Peck & Greer owned by the Robeco Group, which has more than $100 billion in assets, the premier alternative newspaper chain in the U.S. is now partially foreign-owned. Weiss, Peck & Greer's Private Equity Group has media investments in Lionheart Newspapers, a 70-title group of community newspapers with a combined circulation of 850,000 and Regent Communications, a radio company with 29 stations in eight markets.