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Thursday, October 16, 1997

Sale of ARN to Scripps complete

By DOUG WILLIAMSON / Abilene Reporter-News

The Abilene Reporter-News is experiencing a historic change in ownership.

The Reporter-News, one of the two founding papers of Harte-Hanks Communications Inc. more than seven decades ago, became part of the E.W. Scripps Co on Wednesday.

The transaction was consummated when Scripps paid $700 million in cash for the Reporter-News and five other Harte-Hanks newspapers, along with a radio station and television station in San Antonio.

No significant changes are expected in the operation and management of the newspaper, officials said.

"I think you can be confident there will be very few if any significant changes initially," said Alan M. Horton, Scripps senior vice president of newspapers.

"The paper is a good paper. It's well run by good people. The staff is competent. The product is accepted in the marketplace. There's no reason for us to make any significant early changes."

The sale was hailed as an all-around win-win situation.

"I believe this sale will be good for nearly all stakeholders -- employees, shareholders and communities," said Frank Puckett, Reporter-News publisher and president. "Harte-Hanks will be able to concentrate on its key strategy of becoming more of a direct-marketing company. Scripps will acquire several well-positioned and thriving newspapers, which will complement its core business strategy very well."

Harte-Hanks President and CEO Larry Franklin said, "The sale of our newspapers and TV station is a key step in executing our strategy of becoming a targeted marketing company. Harte-Hanks now will derive 100 percent of its revenues from the direct marketing and shopper businesses."

Puckett said readers should see little change, except for the Harte-Hanks logo leaving and the Scripps logo entering. "The change in ownership will be transparent to most people because Scripps is a company that, like Harte-Hanks, believes very much in local autonomy," said Puckett. "The people who are in the community know best how to publish the newspaper, not someone from a corporate office outside the marketplace."

Editor Glenn Dromgoole said he sees the move as a positive action.

"We will still be a locally run newspaper focusing primarily on local and regional news," he said. "I don't see that ever changing.

"Scripps puts a strong emphasis on the quality of its newspapers, and that should be good news for our staff, our readers and the communities we serve."

Puckett said employees should have a positive experience from the transition.

"Harte-Hanks is our history and Scripps is our future," Puckett said. "Both are very good companies to work for."

The Reporter-News' newest employee expressed optimism about the change. Circulation Director Keith Petty has been on board since Oct. 6, coming to Abilene from a newspaper in Wichita, Kan.

"Because I came from a large (newspaper) company like Knight-Ridder, I can see some similarities with Scripps, especially in the benefits packages and management style," he said. "I think we will have a better newspaper because of the potential of bringing more resources devoted to Abilene and sharing information from a nationwide chain."

Bob Bruce has occupied a desk at the Reporter-News since 1959. He is the longest term employee today. He said he has seen newsrooms change, getting quieter and cleaner -- thanks to computers instead of typewriters and smoke-free regulations.

However, the change from Harte-Hanks to Scripps was one he didn't see coming.

"I was surprised," said Bruce, who is travel editor and a senior staff writer in the regional news department. "I thought (any change in ownership) would be beyond my time here."

Bruce said he is anxious to meet Scripps officials and hear about their philosophy of newspapering.

"The Denver paper -- the Rocky Mountain News -- has gained a lot of notoriety thanks to the JonBenet Ramsey case. I've seen a couple of their folks on network TV. They seem to be very capable," Bruce said.

Harte-Hanks shareholders will see a more cash-rich company. The corporation, based in San Antonio, has about $192 million in outstanding debt. It is expected to pay off part or all of the debt.

"Harte-Hanks will be able to move much more quickly to becoming a 'pure-play' company focusing on the direct marketing business," Puckett said. "I would not be surprised to see them move to acquisitions very quickly. This should make them very attractive to investors who like direct marketing."

Puckett said the newspaper's tradition of civic leadership should not change with the new owner.

"I believe they will leave those decisions up to the local people who manage the individual newspapers," he said.

Along with the Reporter-News, Scripps purchased the Times Record News in Wichita Falls; the Standard-Times in San Angelo; the Caller-Times in Corpus Christi; the Star Courier in Plano; the Independent-Mail in Anderson, S.C.; KENS-TV and KENS Radio, both in San Antonio.

Also on Wedneday, Scripps traded the radio and television stations to A.H. Belo Corp. for $75 million in cash and 56 percent ownership of the TV Food Network -- a culinary cable channel.

Transfer of the KENS broadcast licenses to Belo is subject to government approval.

With the transactions, Scripps becomes the 10th largest American newspaper organization. Circulation of Scripps' 20 newspapers is 1.41 million daily and 1.63 million Sundays.

Its newspapers are in Albuquerque, N.M.; Birmingham, Ala.; Cincinnati, Ohio; Memphis and Knoxville, Tenn; Denver and Boulder, Colo.; Evansville, Ind.; Naples and Stuart, Fla; Redding, Ventura County and Vero Beach, Calif.; and Bremerton, Wash.

Scripps also owns United Media, a licensor and syndicator of news features and comics, including Dilbert; Cinetel Productions, a creator of programming primarily for cable TV networks; Scripps Howard Productions, a creator of programming primarily for broadcast TV network; and the Scripps Howard News Service. The acquisition also adds 1,600 employees to Scripps' 6,800-person workforce.

Scripps' acquisition of Harte-Hanks properties is among a group of transactions in the past two years totaling more than $2.5 billion. It sold its cable-TV distribution system in 1996 to Comcast Corp. and recently swapped newspapers in Monterey, Calif., and San Luis Obispo, Calif., for the Boulder Daily Camera in Colorado.

Scripps, like Harte-Hanks, has deep roots in the newspaper industry. The company was begun in 1878 when 24-year-old Edward Willis Scripps started the Cleveland Penny Press with $10,000 he borrowed from family members. The newspaper, named for its affordable price, was aimed at an emerging mass audience of urban workers.

Scripps took the formula to dozens of other cities, building the first chain of newspapers under common ownership. Scripps stock closed at 41 5/8, down 1 3/8, and Harte-Hanks ended the day at 37 3/8, down 1/2.

(Also contributing to this story was Deborah W. Fisher of the E.W. Scripps News Service.)


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