New York Daily News on Auction Block After Inquiry of Interest

NEW YORK (The Deal) -- The New York Daily News is on the block, after an unnamed party approached the daily's billionaire owner Mort Zuckerman about a sale.

"A few weeks ago, we were approached about our potential interest in selling the Daily News," Zuckerman said in memo to staff that appeared on the non-profit site Poynter.org. Lazard (LAZ) is handling the process.

"It certainly is a prized possession in so far as having a long history in the newspaper industry," said Mark Fratrik of BIA/Kelsey. At a time of challenging economics for newspapers, he added, it would not be surprising for any owner of a single paper to exit the business.

Moving in the opposite direction, of course, was Amazon.com (AMZN) founder Jeff Bezos, who paid $250 million for the Washington Post last year and does not own other papers. Also last year, Glenn Taylor, the owner of the Minnesota Timberwolves National Basketball Association franchise, acquired the Minneapolis Star Tribune, reportedly for less than $100 million. In 2013, Boston Red Sox owner John Henry bought the Boston Globe and its affiliated operations, including the Worcester Telegram & Gazette from the New York Times Co. (NYT) for $70 million.

The Daily News isn't the only property on the market. Alden Global Capital-backed Digital First Media announced an auction last year. Bids for the newspaper group were expected in December.

Boutique media bank Dirks, Van Essen & Murray reports that sales of 67 daily newspapers fetched $760 million last year. New Media Investment Group (NEWM) was the biggest spender, with the $280 million purchase of Halifax Media Group.

Newly independent Tribune Publishing (TPUB) has made small purchases of newspapers near markets where it publishes. Warren Buffett's Berkshire Hathaway (BRK.A) (BRK.B) has acquired a mix of daily and weekly papers, but has focused on smaller markets. Hearst Corp. owns large market papers such as the Houston Chronicle and San Francisco Chronicle.

The field of buyers could expand this year. Gannett (GCI) plans to spin off its newspaper unit. Meanwhile, E.W. Scripps (SSP) and Journal Communications (JRN) are merging and will break off their print businesses. Once separated from their broadcast interests, the publishing businesses could expand through acquisitions.

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