Sussman and MTM and the value of the company

Posted Wednesday, March 28, 2012 in News

Sussman and MTM and the value of the company

by Gina Hamilton

PORTLAND -- News from MaineToday Media suggests that the loan from financier S. Donald Sussman, which was supposed to be $3.3 million with an equity stake of 5 percent, has now become a straight purchase of private stock.  According to MaineToday's own reporting, this will give Sussman a 75 percent interest in the newspaper chain.

This suggests a much-debased value for the organization of a little more than $4 million.

The Blethen family, best known for its Seattle newspaper, the Seattle Times, bought the newspaper chain in 1998 and paid $250 million.  When Richard Connor's team bought the ailing chain in 2009, they paid about $32 million ... barely the value of the real estate holdings.  The real estate was largely sold off during the Connor era, and now, by simple mathematics, the chain suggests it is worth only about $4 million, with a majority to be held by Sussman's Maine Values LLC.

Sussman, who is also married to Congresswoman Chellie Pingree, reiterated a pledge not to interfere with the editorial direction of the newspapers.

The change was requested by institutional investors such as out of state pension firms, according to MaineToday Media Board of Directors Chairman Peter Brodsky. The investors believed the additional debt could have hampered the company's growth strategy.

"It's a good deal for our company, our 412 employees and the 3,000 Maine vendors we work with in communities across the state," Brodsky said in a statement. "As with any deal, we had to listen to our institutional investors and be responsive to their feedback."

Sussman said that he would have preferred the original deal, but he was unwilling to abandon an important community resource and the hundreds of jobs that came with it.

Gina Hamilton is the former editor of the Coastal Journal, one of the MaineToday newspapers.

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