HD Media is the successful bidder to purchase the Charleston Gazette-Mail.
The Huntington-based company secured its status as the likely purchaser of West Virginia’s largest newspaper after the owners of Ogden Newspapers decided they weren’t going to further pursue the purchase.
HD Media’s bid for the paper was a little less than $11.5 million. Ogden had bid $10.9 million.
In what was scheduled to be the auction for the bankrupt company, Charleston Newspapers attorney Brian Audette, who presided over the auction, named HD Media the successful bidder at 12:10 p.m. Thursday.
No attorneys or other representatives attended the noon auction on behalf of Ogden. No other bids were made during the auction.
The next step in the sale is a hearing Friday morning before U.S. Bankruptcy Judge Frank Volk, who will hear arguments on any objections to the sale before handing down his final ruling.
If Volk approves the sale, HD Media would be under contract to purchase the Gazette-Mail, with the goal of closing the sale by March 31, Audette said.
“If it’s not, I wouldn’t expect it to go that much longer than that,” Audette said.
Audette said Ogden’s withdrawal from the auction surprised everyone else involved.
“We had all along believed they were very motivated to acquire the company,” Audette said before the auction.
Norman “Trip” Shumate, president and chief financial officer of Charleston Newspapers, said company officials learned that Ogden would pull out of the purchasing process at about 5 p.m. Wednesday.
In a letter addressed to Audette, Ogden CEO Bob Nutting said company officials believed they had bid a “full and fair price” for the Gazette-Mail before bankruptcy proceedings began.
Nutting said Ogden officials communicated their intentions to Audette on Wednesday, and he said he sent the letter to Audette Thursday morning.
Nutting said the company decided to not increase its bid after HD Media’s bid was qualified in court.
“Until recently, we understood that we were the only company willing to bid and attempt to lead this business out of bankruptcy,” Nutting said in the letter. “We are very pleased that another company has indicated a willingness to take on this challenge.”
Based in Huntington, HD Media is the parent company of The Herald-Dispatch. HD Media also owns The Wayne County News, the Logan Banner, Williamson Daily News, the Coal Valley News and The Pineville Independent Herald.
All of the HD Media publications are printed on the presses at the Gazette-Mail’s downtown Charleston location.
Doug Reynolds, a former member of the West Virginia House of Delegates who was the Democrat candidate for West Virginia attorney general in 2016, is the managing partner of HD Media.
Reynolds said the Gazette-Mail would be a new opportunity to create “synergies” with the other HD Media operations.
“We’re really excited,” he said. “I think this represents a new chapter and a new day of coordinating between Huntington and Charleston, in general. I think we’re going to be able to deliver a superior news product in all our news markets.”
Reynolds said the Pulitzer Prize-winning Gazette-Mail has “incredible journalism” and that there is a demand for good local content in the media market today.
“Obviously, we need to continue to support great journalism and work on making sure that the great things they’re doing will continue to be reported across different venues, and mainly work on the business side of that,” Reynolds said of the Gazette-Mail.
Reynolds said he doesn’t have any intentions of substantial employee layoffs.
HD Media’s purchase of the Gazette-Mail also includes other investors. At least two of those investors were present for the auction.
Brian Jarvis, president of NCWV Media, which publishes The State Journal and The Exponent-Telegram, and W. Marston “Marty” Becker were introduced during the auction as being involved in HD Media’s purchase of the Gazette-Mail.
Becker, board chairman of Australia-based QBE Insurance Group, partnered with Bray Cary in the early 2000s to create West Virginia Media, which operated The State Journal and several West Virginia television stations. The TV stations were sold in 2015, and NCWV Media assumed control of The State Journal in 2016, with Cary remaining a minority partner.
After the auction, Reynolds said there are other investors, but he declined to comment on who else is involved.
After Volk hands down his order Friday, the sale should be closed on or before March 31, according to an order he handed down in February.
To initiate the auction, any bids after the bankruptcy filing had to exceed Ogden’s bid by $500,000, which represents a $400,000 break-up fee to be paid to Ogden, plus $100,000.
The Chilton family owned The Charleston Gazette for decades and, since 2015, has owned the Charleston Gazette-Mail, the combined Gazette and Charleston Daily Mail.
Trip Shumate is married to Susan Chilton Shumate, publisher of the Gazette-Mail.
After the auction, Trip Shumate said things are emotional, now that the bulk of the work on the sale is over, but that he is glad there are local buyers for the paper.
“I just hope they continue — and they will continue — to produce a strong, local-news-focused product,” Shumate said. “That’s all I can hope for.”
The initial sale of the Gazette-Mail began in September 2017, Audette said during the first-day bankruptcy hearing on Feb. 1.
A New York-based firm contacted at least 15 potential buyers, and 13 of those entities entered into nondisclosure agreements to get more information about the newspaper, Audette said in February.
Three entities placed what were considered “serious bids” prior to the bankruptcy filing, Audette said.
No court records indicate who were the initial bidders prior to Charleston Newspaper’s bankruptcy proceedings.
Under the Wheeling Newspapers name, Ogden was the highest bidder to assume ownership of the company at the time the Gazette-Mail owners filed for bankruptcy on Jan. 30.
Ogden owns daily newspapers in Wheeling, Parkersburg, Martinsburg and Elkins, as well as several other publications in West Virginia and across the country.
According to documents in the bankruptcy case, Charleston Newspapers has more than $31 million in liabilities, according to a declaration of support filed with the other documents. About half of that, $15.6 million, is an outstanding United Bank loan balance, plus interest and fees, from 2006.
Charleston Newspapers’ second-largest liability is more than $12 million owed to the Pension Benefit Guaranty Corp., the federal agency intended to help guarantee retirement plans. That total includes the plan’s unfunded benefits, and due and unpaid plan contributions, according to the declaration.
The newspaper’s liabilities also include an arbitration award the owners of the Gazette-Mail were ordered to pay in 2017 to the former owners of the Charleston Daily Mail.
Arbitrator Edward McDevitt ruled that the Gazette-Mail’s owners had to pay nearly $3.8 million to the former Daily Mail owners. The award represents the profit from the Gazette-Mail owner’s sale of the dailymail.com internet address, past-due and future management fees, attorneys fees, court costs and post-judgment interest.