Landmark Communications, a media company that turned weather-watching into a billion-dollar cable enterprise, is looking to sell. The company confirmed that...
WASHINGTON — Landmark Communications, a media company that turned weather-watching into a billion-dollar cable enterprise, is looking to sell.
The company confirmed that it had hired two New York merger-and-acquisition specialists to explore divesting its businesses, which consist of the Weather Channel as well as the Virginian-Pilot newspaper in Norfolk and dailies in Annapolis; Greensboro, N.C.; Roanoke, Va.; and nearly 50 community newspapers.
It also owns TV stations in Las Vegas and Nashville, and Dominion Enterprises, a Norfolk-based national chain of print and online classified-ad publications.
But its most valuable holding is the Weather Channel, which founder Frank Batten Sr. predicted at its launch 27 years ago would be “the most popular channel on cable TV,” with its round-the-clock, locally focused forecasts. While it’s not the most popular cable channel, it is received by 97 percent of all homes with cable.
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The Weather Channel has given weather sex appeal. (Think miniseries, hosted by Harry Connick Jr., on the 100 Biggest Weather Moments.) Its Web page gets more traffic than Facebook, with more than 32 million unique visitors each month. Hoover’s reported that Landmark, a private company, had $1.75 billion in sales in 2006.
Analysts have said the Weather Channel could sell for $5 billion.
“This is something we’ve initiated,” said Richard Barry III, vice chairman of Landmark, who said the company would not discuss its motivations. “This is the first day of a multimonth process, and we’re going to get started right away and explore the options.”
Chief Executive Frank Batten Jr. told the Virginian-Pilot that he decided to explore the sale, with advice from his family.
Barry said all of Landmark’s companies are doing well and that its newspapers have fared better than others in the industry, which has seen profit drop as circulation declines. But the family may have taken the company as far as possible, industry observers suggested.
“Frank was a great journalist and a great believer in journalism, and his son was a great believer in building companies,” said one former business associate who spoke on condition of anonymity because the deal is not yet finished.
“They see the Weather Channel at the top of its game. I know for a fact they don’t believe the newspaper industry to be dying. But no one believes it’s a blockbuster. So I think they feel right now they’re going to get a very good value for the Weather Channel and an OK to decent value for the newspapers now.”
Potential buyers for the Weather Channel could include Comcast and Walt Disney Co., analysts said.
“Cable has not, unlike newspapers, declined in value,” said John Morton, an independent media analyst in Silver Spring, Md. “It’s doing very, very well.”
While newspapers are still making money, the days of 20 to 30 percent profit margins are probably gone, Morton said. “So if you look forward and have all your family’s jewels in pretty much one area, it could cause some concern about their worth in the future.”
Founded by Samuel Slover, an ambitious young newspaperman with a knack for turning around foundering properties, Landmark grew into a series of publications that cover communities in Norfolk, Virginia Beach, Portsmouth, Chesapeake and Suffolk. Slover also acquired Virginia’s first radio station and launched the state’s second television station.
“It’s always a sad day when you consider that” the sale of Landmark would mark the end of a 50-year era for a company that began as a newspaper but whose influence has grown far beyond, Barry said.
Landmark’s flagship property, the Pilot newspaper, has staved off dramatic readership declines by changing its design and launching local Web operations and community-journalism projects. From 2000 to 2006, daily paid circulation dropped just 6.5 percent.
Eventually, Slover handed the company over to his nephew, Frank Batten Sr., who increased Landmark’s holdings. His son, Frank Batten Jr., took over the company in 1998.
Washington Post staff researchers Richard Drezen and Bob Lyford contributed to this report.