The sale of the 8-acre campus that formerly was home to The Dallas Morning News could come late this year or early next year, the company said Thursday.
Dallas-based A. H. Belo Corporation, parent to The News, officially announced in March that the news organization's longtime home on Young Street was for sale. That announcement came about three months after the news organization and parent moved to newly designed space in the historic former public library on Commerce Street in downtown Dallas.
In April, the company announced that Jim Moroney, then chairman, president and chief executive of A. H. Belo, planned to retire the following month.
During an eight-week transition period, “we hit the pause button” on the sale, said Robert Decherd, who returned in May to serve as chairman and chief executive of A. H. Belo.
“But we are fully engaged in the sale process now,” Decherd told analysts on a conference call early Thursday. “We would expect to see expressions of interest by the end of the third quarter.”
The company has consistently given tours of the property but expects now to start receiving formal and informal suggestions of what a potential buyer would pay, said Katy Murray,
senior vice president and chief financial officer, in an interview.The company has said it hopes to receive at least $30 million.
Decherd said the company is “looking really only for ... straight cash deals,” but added that “we can't predict how potential buyers will come forward.”
The former A. H. Belo campus abuts The News' former corporate cousin WFAA-TV. Given the complexity of the deal and easement issues, it "may be that this closing takes longer than would be typical but not by much," Decherd said on the call. "We're looking optimistically to the end of this year. It may spill into 2019."
A. H. Belo has about $57 million in cash and equivalents on its balance sheet and the campus sale could add another $30 million. One analyst wondered what was to become of that cash.
Decherd said that is a regular topic of conversation for the company's board of directors, adding, “We’re not going to sit on $85 million of cash.”
In March, the company said there were “about a half a dozen companies that we’re actively engaged with” for a potential acquisition. Murray said Thursday those firms turned out to be “just not a fit.”
The News, which began publishing in 1885, is part of a market segment that's been battered by a shift of consumers and advertisers from print newspapers to the internet.
In discussing the company’s fortunes, executives find good news in the strong balance sheet, including a lack of debt, and improving profit margins for the company’s marketing services company, Belo and Co.
That contrasts with a nearly 19 percent decline in revenue in the quarter ended June 30. The drop was due partly to an accounting change and to the loss of advertising from a major national grocer, which shifted its advertising strategy. The company declined to name the grocer.
A. H. Belo said Wednesday it narrowed its second-quarter loss compared with a year ago, even as the pace of growth in digital subscriptions slowed.
For the three-month period that ended June 30, the media company posted a net loss of $534,000, down from a $805,000 loss in the same quarter last year. The company reported a $4 million net loss in the first three months of 2018.
In the second quarter, total revenue fell nearly 18.9 percent to $51.2 million, a drop of $11.9 million from the second quarter of 2017. That followed a similar drop in the company’s first quarter, when total revenue was $49.5 million, or 18.8 percent lower than a year earlier.
Decherd said he saw a “mixed” report from print media peers and noted that all legacy newspapers are being buffeted by the same winds.
The financial report is the first to be issued since Decherd returned to the leadership of the company after Moroney’s retirement.
"I am very excited to return [to] the company as CEO, and am confident A. H. Belo is well-positioned financially to address the challenges and opportunities in our markets,” Decherd, who also is chairman and president, said in a statement.