Dolan Media Co., The Daily Record's parent company, files to go

Daily Record, The (Baltimore), Apr 27, 2007 by Dori Berman

Bucking an industry trend that has seen a number of large newspaper chains go private, the Minneapolis-based parent company of The Daily Record filed notice Thursday with the Securities and Exchange Commission that it intends to go public.

Dolan Media Co., which has nearly 1,200 employees and operates 60 print publications in 19 markets, wants to raise up to $150 million, according to the filing. The company did not disclose a price per share. Dolan said it expects to list its common stock on the New York Stock Exchange under the symbol DM.

Dolan Media's papers are mostly business, court and commercial publications. Based on 2006 revenues, executives believe it is the nation's third largest business journal publisher, second largest court and commercial publisher and one of the largest public notice carriers, according to the filing. The company operates 42 publication Web sites, which had nearly 262,000 unique users last month.

According to the filing, Dolan Media had a loss of $14 million in 2006 on revenue of $111.6 million. In 2005, the company lost $5.71 million on revenue of $77.9 million.

Chairman and CEO James P. Dolan started the company in 1992 and has since made 38 acquisitions in what Dolan Media calls its business information division, which includes the newspapers. The company also operates a professional services division, which includes mortgage default processing services and appellate services.

Last month, Dolan Media paid $2.8 million for the business information services assets of Venture Publications Inc., which consists of several publications serving Mississippi and an annual business trade show. Other markets where Dolan Media has publications include New Orleans, Boston, Long Island, Phoenix and Oklahoma City.

The company will use proceeds from the IPO to pay off debt, redeem outstanding shares of preferred stock and make acquisitions, according to the filing.

Dolan, 57, received a journalism degree from the University of Oklahoma in 1971 and has worked as a reporter and editor as well as a newspaper executive. He spent 15 years with Rupert Murdoch's News Corp., starting as a reporter at the San Antonio Express-News and working his way up to become director of the New Media Group at the News Corp. corporate headquarters.

Reached at his office in Minneapolis Thursday, Dolan said he could not comment because of rules mandated by the SEC prior to a company's IPO.

The move to go public comes at a time when part of the newspaper industry is trending in the opposite direction, with publicly held companies or papers being purchased by private owners. Several papers formerly owned by Knight Ridder, including The Philadelphia Inquirer and the San Jose Mercury News, are now in private hands, and the Tribune Co., which owns The (Baltimore) Sun, recently announced plans to sell to a private owner.

The industry has fallen on relatively tough times, resulting in high-profile newsroom cuts at a number of large papers around the country.

Rick Edmonds, a media business analyst with the Poynter Institute, a media training center and think tank in St. Petersburg, Fla., said smaller publications have not hit the same rough patch.

"The companies that are having the hardest time right now are either big or mid-sized metropolitan papers. When you go to the smaller markets and weeklies, they're not only doing better by contrast, they're doing pretty well," Edmonds said.

Niche publications like those owned by Dolan Media often have the benefit of pulling in more specialized advertising revenue targeted to the papers' specific readerships, Edmonds said. In Dolan Media's case, that includes lawyers and business executives.

Kip Cassino, vice president of research for Virginia-based media research firm Borrell Associates, said newspapers typically go public when they want capital to expand. Most of the recent growth in media companies has been in the electronic arena, he said.

"If you look at the percentage of growth in newspaper revenues - over the last several years, a disproportionate amount of that growth has come from the online side as opposed to the print side," Cassino said. "So if your niche publications have the capability to put themselves in an online place, they'll probably be very successful."

The Daily Record and other papers owned by Dolan Media have upgraded and revamped their Web sites in the last year.

Dolan Media purchased The Daily Record in May 1994. The Daily Record has operated in Baltimore since its founding in 1888 by Edwin Warfield, who served terms as governor and state senator in the early 1900s.

Initially the paper consisted mostly of legal notices and public notice advertising,. In the 1980s the paper began including staff- written news articles and features. The Daily Record has about 3,800 paid daily subscribers and 4,200 subscribers to the Friday edition.