Wall Street Journal, November 15, 2024, article: "Investor Building Newspaper Chain Eyes Lee Enterprises, DallasNews" [Picking up on business of news publishing where Berkshire Hathaway left off]

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Picking up on business of news publishing where Berkshire Hathaway left off

For past Forum attention to investor interests in the evolution of news publishing, see the 2020-21 News Publishers Project Reference, including the September 30, 2020 Forum Report of Shareholder Survey: The New York Times Company 2020 Investor Interests.

For its specific relevance to the interest reported in the article below, see the Lee Enterprises press release: March 16, 2020: "Lee Enterprises completes acquisition of Berkshire Hathaway newspaper operations."

Source: Wall Street Journal, November 15, 2024, article

Business | Media

Investor Building Newspaper Chain Eyes Lee Enterprises, DallasNews

Florida billionaire David Hoffmann aims to create the second-largest newspaper group in America

By Colin Kellaher

Nov. 15, 2024 1:33 pm ET

David Hoffmann said a combination of his Hoffmann Media Group, Lee Enterprises and DallasNews would create the second-largest newspaper group in America. PHOTO: NATALIE BEHRING/GETTY IMAGES

A Florida billionaire with a fondness for local news is looking to build a newspaper giant by potentially scooping up publishers Lee Enterprises and DallasNews.

David Hoffmann, who last month disclosed a 5.2% stake in Lee Enterprises, has raised that interest to 8.7%, making him the Davenport, Iowa, company’s second-largest shareholder.

Hoffmann also disclosed a new 5% stake in DallasNews, making him one of the Dallas Morning News publisher’s biggest investors.

In an interview Friday, Hoffmann said he aims to create the second-largest newspaper group in America behind Gannett, and that a combination of his Hoffmann Media Group, Lee Enterprises and DallasNews would do just that.

Hoffmann said he has held friendly talks with Lee’s management, but that he hasn’t yet made contact with DallasNews, which is controlled by Robert Decherd, the great-grandson of a Dallas Morning News co-founder.

Hoffmann said he believes local newspapers “remain an integral part of the American fabric” and are currently undervalued, and that he thinks the industry can operate profitably in both print and digital.

Lee in September sold Napa Valley Publishing, including the Napa Valley Register, to Hoffmann Media for an undisclosed amount.

Hoffmann said he plans to continue to build his stake in Lee, which publishes dozens of daily newspapers, including the St. Louis Post-Dispatch, but that he has no intention of any hostile action.

Lee earlier this year adopted a poison pill shareholder rights plan with a 15% trigger after India’s Quint Digital said it had built a stake of more than 12% in the publisher.

Hoffmann said he sees a significant value proposition in both Lee and DallasNews, adding that he also is looking at the acquisition of several privately owned newspapers.

Shares of Lee, which were changing hands at around $14 before Hoffmann initially disclosed his interest last month, hit a 52-week high of $19.63 on Oct. 24 but have since pulled back and were trading at $15.42 Friday. The publisher sports a market capitalization of around $100 million and had long-term debt topping $450 million as of Sept. 30.

Shares of DallasNews, with a market value of roughly $27 million, were recently down 0.6% to $5.08.

Write to Colin Kellaher at colin.kellaher@wsj.com

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