By Henry Walker
The secret is out: The Nashville Banner sold for a lump-sum payment of $65 million, according to documents on file with the U.S. Department of Justice.
That means Banner co-owners Irby Simpkins and Brownlee Currey Jr. each walked away with more than $25 million after paying off the paper’s debt (reported to be $12.7 million) and setting aside a small amount for Banner employees. In late February, Simpkins and Currey sold the Banner to Gannett, the nation’s largest newspaper chain, and closed the 120-year-old afternoon daily.
Until now, the $65 million selling price has been a closely guarded secret, at least in Nashville. Simpkins has said he is not allowed to discuss the matter, and The Tennessean has never published details of the sale.
But last week the Nashville Scene obtained from the U.S. Department of Justice a copy of public documents, dated March 10, 1998, that outline the terms of the sale.
The Banner and Gannett, which owns The Tennessean, were required under federal law to notify the justice department of any change in their “joint operating agreement,” known as the JOA. The two newspapers operated under the JOA from 1937 until the Banner closed. The parties did not need federal approval to dissolve the agreement and close one of the papers.
When the Banner closed, Simpkins talked in general terms about the paper’s declining circulation and the economic problems of afternoon papers nationwide. As recently as last week, he told a Nashville audience that he and Currey received only a “nominal” return on their investment. Simpkins, Currey, and Nashville businessman John Jay Hooker bought the Banner in 1979 for $25 million.
The $65 million sale price confirms, however, that the Banner was an extremely profitable newspaper, thanks to the JOA, and probably could have stayed in business until the JOA expired in 2016. The sale price also seems to corroborate reports that Simpkins and Currey were each pocketing as much as $1 million a year in profits from the paper while they owned it. The $65 million represents a payout to each owner of about $1.4 million a year until the expiration of the JOA.
While the sale price is $10 million to $15 million higher than most observers had estimated, it still appears to be a good deal for Gannett, which was obligated under the JOA to pay the Banner a percentage of the profits from the combined operation of both papers. Over the next 18 years, those payments would likely have totaled around $150 million, according to a source familiar with the finances of both papers.
The documents filed with the justice department say the Banner “on a stand-alone business...is no longer profitable,” but they say nothing about the paper’s profits under the JOA. The documents also indicate that, while the parties agreed not to talk about the deal prior to the Banner’s closing, no restrictions now prevent the parties from discussing the terms of the sale.
Simpkins and Currey did not return calls requesting comment on the sale. Gannett’s lawyer said he would call back later. As of press time, he had not.
Rejoicing at the 'Journal'
Nashville Business Journal publisher Kevin Lorance was abruptly fired last week by the paper’s new boss, Ray Shaw. Lorance was replaced by 30-year-old Scott McQuigg, advertising director of the Tampa Bay Business Journal.
Shaw is chairman of American City Business Journals Inc., which owns the Tampa paper and 36 other business journals. He bought NBJ last October.
Sources at NBJ say they had expected Shaw to fire Lorance seven months ago but that Lorance was apparently given the chance to turn things around at the paper, which has been losing both circulation and staffers.
Three years ago, the paper’s paid circulation was about 8,400. At the beginning of this year, that number was down to 7,400. The paper has also suffered from unusually high staff turnover. There have been at least six circulation directors in the last three years and, one staffer estimated, a total of 28 changes among a management staff of eight people. Both current and former staffers attribute much of the turnover to Lorance’s abrasive and unpredictable management style. Sources said the announcement of the publisher’s “resignation” sparked a quiet celebration in the newsroom.
Lorance said Monday he has no immediate plans and declined to comment on the circumstances of his departure.
A brief, unbylined story in this week’s issue of NBJ reports that Lorance “resigned from the company.” Several current employees, however, said otherwise. Lorance himself reportedly told a staffer afterward that he “figured it was going to happen sooner or later.”
A rose is a rose
Tennessean editors bristle at the often repeated criticism that, like all Gannett-owned papers, Nashville’s daily is controlled more by Gannett headquarters in Arlington, Va., than by editors in Nashville.
Thanks to documents from the justice department, however, we now know that The Tennessean, bought by Gannett in 1979, hasn’t even been able to keep its own name.
According to Gannett, the official name of Nashville’s daily paper is now “Gannett Satellite Information Network, Inc.,” or “GANSAT,” which is “doing business as” The Tennessean. GANSAT is required by law to register its “doing business as” name with the state, but, according to the files at the secretary of state’s office, hasn’t done it.
Tennessean editors bristle at the often repeated criticism that, like all Gannett-owned papers, Nashville’s daily is controlled more by Gannett headquarters in Arlington, Va., than by editors in Nashville.
Thanks to documents from the justice department, however, we now know that The Tennessean, bought by Gannett in 1979, hasn’t even been able to keep its own name.
According to Gannett, the official name of Nashville’s daily paper is now “Gannett Satellite Information Network, Inc.,” or “GANSAT,” which is “doing business as” The Tennessean. GANSAT is required by law to register its “doing business as” name with the state, but, according to the files at the secretary of state’s office, hasn’t done it.
To comment or complain about the media, leave a message for Henry at the Scene (244-7989, ext. 445), or send an e-mail to henry@nashscene.com.
