ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, June 15, 1996 TAG: 9606170061
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: JEFF STURGEON STAFF WRITER
The company that owns the greatest number of Virginia-based newspapers is about to get bigger.
Media General Inc., publisher of the Richmond Times-Dispatch and four other Virginia daily papers, said late Thursday it plans to buy the Danville Register & Bee for $38 million.
One family has owned the Danville paper for 100 years of its 165-year existence and has made unusual plans for proceeds of the sale. The newspaper's longtime owner and publisher, Elizabeth Stuart James Grant, arranged before her death in 1990 to invest the money and pay interest from the account to nine charities and schools, including Virginia Military Institute and the University of Virginia.
In addition, the paper's roughly 100 employees would divide a $400,000 contribution to their retirement plan to be taken from the $38 million.
The companies said they expect to close the deal this summer.
The Register & Bee goes to 23,000 subscribers weekdays and Saturday and 27,000 on Sunday. Adding that to the five daily Virginia newspapers that Media General already owns, the company's combined statewide daily newspaper circulation would be 316,000 weekdays and 357,000 on Sunday, the company said. In comparison, Landmark Communications Inc., owner of The Roanoke Times and The Virginian-Pilot in Norfolk, has combined Virginia circulation of 312,000 weekdays and 363,000 on Sunday.
Norfolk-based Landmark Communications had considered buying the Danville paper but found it too expensive given the level of return, said Larry Coffey, president of the company's Landmark Community Newspapers division.
Media General also has interests in televisions stations, cable television systems, papermaking and electronic publishing.
Media General executives said the Danville paper would go well with Media General's purchases, announced in September, of daily newspapers in Charlottesville, Culpeper, Lynchburg and Suffolk, along with 23 other papers, from Worrell Enterprises Inc., for about $230 million.
J. Stewart Bryan III, Media General's chairman, president and chief executive officer, said then he would improve the papers with more state and national news. He said in an interview Friday he will do the same with the Register & Bee.
The purchase also would expand opportunities for advertisers and enable the company to post more information on its on-line version of the Times-Dispatch, a computer site called Gateway Virginia, said Bob Pendergast, a Media General vice president and director of corporate communications.
If Danville is like other small-city papers, said one analyst, its readers consistently expect a certain look and content from their paper and may not like changes the likely new owner could make.
But Media General will move cautiously to refine the paper, because "they have paid a high price and they don't want to undermine the very character of the newspaper that has made it have that value," said John Morton, a media analyst at Lynch, Jones & Ryan, a securities broker in Washington, D.C.
"The daily newspaper business is an intensely local business. I suppose there could be a potential danger Media General could dictate editorial [page] stances, but it's not likely to do that," Morton said.
Media corporations of Media General's size and type often improve family-owned newspapers they take over, by generating higher profits to pay for salaries and resources, he said.
The sale of Register Publishing Co., owner of the Register & Bee, was aborted two years, on complaints from Attorney General Jim Gilmore - who was acting on behalf of UVa and VMI - that the business was worth more than a $19 million selling price. The would-be buyer then was Charles A. Womack Jr., publisher of a dozen weekly papers in Virginia and North Carolina.
LENGTH: Medium: 76 lines ILLUSTRATION: GRAPHIC: Map showing locations of Media General newspapers inby CNBVirginia.