What Investment Companies Say About Themselves

Appendix E: Statements from Investment Companies

Public statements offer valuable insight into how owners of newspapers balance their civic journalistic responsibilities with business imperatives. The websites of the newspapers owned by the seven largest investment entities almost always state their commitment to journalistic excellence. In contrast, the websites of their parent companies, and statements by their executives, focus on issues around maximizing shareholder return. Some investors seek to own newspapers in markets where there is little competition, specifically rural markets with few news substitutes. Others make it clear that rapid acquisitions and consolidation are a key part of their strategy, and they use aggressive cost-cutting as a means to pay off debt and turn a profit.

Here is a sampling of statements from company websites and executives. For full context on each of the following quotes, please visit the embedded links.

New Media/GateHouse

New Media/GateHouse is owned and managed by Fortress Investment Group, a private equity investment group that manages more than $70 billion in assets. In 2006, Fortress became the first large private equity firm to go public. Shares are traded on the New York Stock Exchange.

From the GateHouse Media website:
"Our mission is to deliver high quality and trusted journalism, products and services that enrich the communities we serve – our readers, commercial partners, employees and investors. GateHouse publishes 620 community and business publications, including 125 daily newspapers, along with over 530+ local affiliated websites.”

From the Fortress Website and other official documents:

  • In its first annual report after going public in 2007, Fortress described its approach to business: “Our objective is to generate high returns for our investors across our various funds regardless of the current business environment.”
  • The 2014 annual report stated, “Investment performance is our cornerstone – as an investment manager, we earn more if our investors earn more.”
Michael Reed, CEO of New Media/GateHouse, Newspaper Acquisitions

Michael Reed

Statements from executives at New Media/GateHouse:

  • In a 2008 press release, Michael Reed, CEO of New Media, defended the sale of two Nebraska newspapers as a move to increase profitability: “While we are constantly evaluating investment opportunities in the local media sector and continue to have a very strong pipeline of future opportunities, we did not see the Grand Island operation as a good strategic or geographic fit and felt we could redeploy the capital more effectively elsewhere.
  • In 2013, GateHouse announced the sale of several Massachusetts newspapers, as well as the closure of 10 Boston-area weeklies. Sean Burke, GateHouse’s New England president and group publisher, told the Boston Business Journal: “What we’re doing here is concentrating our forces into the markets that are bigger markets (for GateHouse).”
  • According to a separate 2013 Boston Business Journal report, the company hoped to acquire many more newspapers: “Officials at GateHouse and its private equity backer Fortress Investment Group have made it clear that they would look to buy more media companies, post-bankruptcy. A figure of $1 billion in acquisitions over three years was mentioned in one investor presentation.”
  • In a July 2015 press release, CEO Reed wrote: “Our strategy and commitment to create value for shareholders has been consistent since becoming a public company in early 2014. We intend to generate substantial value for shareholders by completing accretive acquisitions, investing in print and digital initiatives to drive long-term organic growth, and returning a significant portion of our stable cash flows to shareholders in the form of a dividend. … We believe we can shield our cash flows from topline declines through measured expense reductions at our acquired properties, and remain confident in our ability to continue to grow free cash flow and our dividend.”
  • In a 2016 interview with Ken Doctor, New Media CEO Reed referenced the sale of the Las Vegas Journal-Review to casino magnate Sheldon Adelson: As a CEO of a public company, my job is to maximize returns for shareholders. ... If I can deploy that $140 million at investment multiples we’ve been paying for properties, then I can create a tremendous amount of value for the company. We’ll be able to expand our portfolio of newspapers tremendously, so it was the right thing to do for the company and the shareholders.”
  • A 2016 Wall Street Journal article described what occurred after New Media’s acquisition of the 144-year-old Foster’s Daily Democrat in Dover, New Hampshire: “Once New Media had acquired the paper, it did what it has done all over the country: cut costs. … ” At other papers, New Media has made significant cuts in newsrooms and among back-office staff, by centralizing copy editing, layout, ad sales, human resources and finance operations at an Austin, Texas, hub. When it acquired the Providence Journal in 2014, it laid off about 25% of the staff, union officials said. Employees at some papers in the Midwest that were part of the original GateHouse say they haven’t received raises in eight years. …
  • ‘New Media has been perhaps the most efficient and systematic consolidator of small-market newspapers in America,’ said Jim Friedlich, head of Empirical Media, a consultancy that advises media companies but hasn’t worked with New Media. ‘So far this seems to be working well for their investors. Whether it is good for their news products and the communities they serve, time will tell.’

Digital First Media

Sean Burke GateHouse’s New England president and group publisher, Sale of Local Newspapers

Sean Burke

Digital First Media’s parent company is Alden Global Capital, a privately owned hedge fund sponsor. According to Bloomberg, “it provides its services to funds, pension plans, foundations, funds of funds, charitable organizations, trusts, estates, corporations, sovereign wealth funds, other institutional investors and high net worth individuals. The firm manages separate client-focused portfolios. It invests in public equity, fixed income and alternative investment markets. The firm primarily invests in value stocks of companies. It seeks to invest opportunistically in event-driven strategies.” Randall Smith, the creator of the company, keeps a low profile and grants few interviews. Therefore, what he does say attracts attention.

From the Digital First Media website:
“Digital First Media publishes award-winning content (49 Pulitzers) that amasses and engages a nationwide audience via 800 multi-media platforms including web, mobile, social, and print. Some of our most trusted community brands include:

  • San Jose Mercury News (BANG)
  • The Denver Post
  • Los Angeles Daily News (SCNG)
  • St. Paul Pioneer Press
  • Macomb Daily Register
  • The New Haven Register
  • Daily Oakland Press
  • Delaware County Daily Times
  • Orange County Register”

“Digital First Media, as our name implies, is transforming the news industry. Our in-house digital agency, AdTaxi, is among the first publisher-owned digital ad networks. By designing custom digital solutions for brand advertisers, AdTaxi puts your message in front of customers ready to buy. AdTaxi’s digital solutions include traditional display, mobile, social, email, and search.”

Steve Rossi, COO, Digital First Media, News Journalism

Steve Rossi

In a 2015 internal memo, CEO John Paton and COO Steve Rossi commented, "We continue to provide exceptional reporting, winning numerous awards for outstanding coverage including the first Pulitzer Prize for the Torrance Daily Breeze in our Los Angeles News Group. Our Denver Post was a finalist for a Pulitzer as well, and our San Jose Mercury News won the prestigious Scripps Howard Foundation Award for Environmental Reporting. And that's just to name a few."

Statements made by Alden’s Randall Smith and other executives associated with Alden Capital and Digital First:

  • In a 2010 leaked internal memo, Smith noted Alden’s commitment to maximizing shareholder return by having a diverse portfolio of assets. “April was a very good month for the portfolio. Our top 10 winners were all larger by dollar value than our largest losing position, and our largest losing position which was a hedge for the portfolio was not significant in magnitude.”
  • At an event sponsored by the DeMatteo Monness brokerage firm in 2011, Smith spoke on his “bullish views on newspapers,” saying: “The decline in print revenues is being offset by the increase in digital. In addition, newspaper companies have a lot of assets that probably aren't being fully utilized and could be sold off. Across the board, newspapers are cutting costs very rapidly and most have positive free cash flow due to the low capex requirement of the business.” The reporter covering the event called Smith “a legend in the distressed debt world” for his track record of restructuring companies.
  • On his appointment as COO in 2014, Steve Rossi commented: “The size and scale of Digital First Media provides opportunity for growth in revenue and growth in audience. We operate in key media markets across the nation and we have assembled tremendously talented teams.”
  • An article by media analyst Ken Doctor described the history of Digital First Media and outlined the company’s approach to newspaper ownership: “Once the promises of a bright digital future for newspapers died down, many of those papers’ considerable real estate and other assets were sold off. As layoffs and severe cost-cutting escalated, Alden began negotiating to sell all of DFM to the highest bidder in 2014.”
  • In an internal memo leaked in 2015, CEO John Paton w
    John Paton, CEO, Digital First Media outlined the company’s approach to newspaper ownership

    John Paton

    rote: “It has been determined that a sale of the Company as previously speculated is not in the best interest of shareholders at this time. However, we continue to have discussions concerning selected assets, and we are looking at potential acquisition opportunities.”

  • In a 2015 interview with Doctor, CEO John Paton said, “We have concluded we are not going to sell the company to a single buyer.” His memo to D.F.M.’s 5,500 employees included “the not-unexpected news that C.O.O. Steve Rossi is replacing Paton as C.E.O. on June 30. Officially, the company is pursuing other strategic options, as it says it has done throughout a more-than-year-long sale–review process. What will that continuing strategic review produce? ‘There’ll be a horse-trading of assets,’ Paton told me, saying markets, readers and employees should expect both selling and buying.”

Community Newspaper Holdings Inc.

Community Newspaper Holdings Inc. (CNHI) was formed in 1997 as a holding company for the Retirement Systems of Alabama, which invests to maximize returns for the state employees’ pension fund.

From CNHI’s website:
"Community Newspaper Holdings Inc. is one of the leading publishers of local news and information in the United States. Founded in 1997, CNHI's newspapers, web sites and niche publications serve more than 130 communities throughout the United States. CNHI publications strive to be leading providers of local news and information in their communities. CNHI values excellence, integrity, respect for employees and a customer focus in all of its operations.”
The stated vision on CNHI’s website is: “We will own and operate media enterprises that offer growth potential and add value to our company."
Here is what the executives of CNHI and the RSA have said:

Donna Barrett, CEO, Community Newspaper Holdings Inc. (CNHI) and newspaper consolidation

Donna Barrett

  • In 1998, Michael Reed – then the CFO of CNHI and later the CEO of New Media/GateHouse – outlined CNHI’s business strategy for the following years to Editor & Publisher: “ ‘We're going to spend more time running the company and less time on acquisitions,’ says Mike Reed, chief financial officer. ‘We will look to do bigger transactions, just fewer of them.’ Whereas in the past a stand-alone weekly selling for $400,000 might have been evaluated, such deals will now be passed up in favor of, say, a weekly group selling for $40 million, Reed explains. The change at the fast-growing Birmingham, Ala.-based group comes at the behest of its money source: Retirement Systems of Alabama. ‘I've basically told them to quit screwing around with the bits and pieces,’ says David G. Bronner, CEO of the $22 billion state pension program, which has pumped $600 million into the two-year old newspaper company. ‘Bigger groups are better organized — and you don't have to whack out as many cobwebs.’ ”
  • RSA’s 2000 annual report states: “The staff will continue to purchase and develop investments that will facilitate the mission of the RSA and serve the interests of our members by preserving the excellent benefits and soundness of the Systems while providing these at the least expense to the State of Alabama and all Alabama taxpayers. With the continued cooperative efforts of the Boards of Control, the RSA staff, and the Legislature, this goal will be achieved.
  • A 2006 article from the Traverse City (Michigan) Record-Eagle interviewed CNHI CEO Donna Barrett on the company’s newspaper acquisition targets: “With a daily circulation of 27,000 and 37,000 on Sunday, the Record-Eagle will be on ‘the larger end’ of CNHI papers. Barrett said it's in the ‘sweet spot’ for newspapers that CNHI wants to acquire, and fits with the company's acquisition strategy that, according to some media websites, received at least $1.8 billion from the Retirement Systems of Alabama state employees' pension fund. ‘The metro papers are facing different challenges," Barrett said. ‘The community newspaper model is more stable and solid.’ ”
  • In 2010, CNHI announced it would move from Birmingham to Montgomery into a new office building being constructed by RSA. Barrett reiterated the strong connection between the two: “The RSA has been a great supporter from CNHI’s very beginning,” Barrett said in a statement. This latest headquarters move is another example of the positive relationship between us.”
  • CNHI’s strategy has been described in press releases as follows: “It is the company’s strategy to seek out newspapers in smaller markets with growth potential. A premium has been placed in purchasing newspapers in geographic proximity, for operational efficiency and in order to provide additional services to readers.”
  • According to the RSA’s website in 2016, “It is the mission of the Retirement Systems of Alabama to serve the interests of our members by preserving the excellent benefits and soundness of the Systems at the least expense to the state of Alabama and all Alabama taxpayers. We are the safe keepers of the pensions for thousands of Alabamians and we take our jobs seriously. It is our goal to seek and secure the best investments and services for our membership, and to ensure that we do everything possible to help our members prepare for and enjoy a successful retirement.”

Civitas Media

Versa Capital Management formed Civitas Media in 2012 when it combined four media subsidiaries the company had bought in bankruptcy or financial distress: Freedom Central, a division of Freedom Communications; Heartland Publications; Impressions Media; and Ohio Community Media (Brown Publishing). Versa Capital Management is a self-described private equity investment firm.

From the Civitas website:

Michael Bush, Previous CEO, Civitas, Media Ownership of Newspaper Chains

Michael Bush

“Civitas Media, headquartered in Davidson, North Carolina, is a dynamic, multi-channel, local information company with strong roots in traditional community newspaper publishing. Civitas—Latin for “community or “citizen”—is exclusively focused on being the premier local information conduit of community news, information and relevant entertainment presented on a variety of platforms including print, digital media, video and other evolving technologies in both content and advertising.
“Civitas Media employs more than 1,200 dedicated, creative and innovative associates across 12 states including North Carolina, South Carolina, Ohio, Illinois, Missouri, Oklahoma, Virginia, West Virginia, Pennsylvania, Georgia, Kentucky and Tennessee. Civitas publishes more than 100 publications for a combined weekly distribution of more than 1.6 million copies.”

Statements made by executives of Civitas:

• Speaking at an industry gathering in December 2012, then-CEO Michael Bush spoke of the need to seek cost-savings: “Our businesses need to find owners who are willing to help us fix our balance sheets so that we can not only survive but also succeed in the coming years. Civitas Media has been fortunate in finding good owners. In return, management must be prepared to revamp our business model shedding unnecessary and irrational expense structures. We must be nimble and agile, creatively inventive and adopt new methods to remain relevant and necessary.”
• At the same industry event, Bush also said: “The pessimism of others leads to understated valuations, which will improve over time as we prove the sustainability of current levels of profitability.” He attributed his company’s financial success to an emphasis on such short-term tactics as “increasing rate as opposed to volume in both circulation and advertising.
• Michael Bush described his approach to newspaper ownership in a 2012 Wall Street Journal article: “Mr. Bush added that local newspapers aren’t encumbered with high fixed labor and manufacturing costs like some big-city newspapers. Larger cities also have a more fragmented media market, Mr. Bush said, while smaller communities typically have a slimmer number of media offerings.”
• In a 2013 press release, Bush defended the decision to close eight suburban Ohio newspapers: “Our core business is focused on developing community news and information portals, in areas that are predominately rural and would not be served well otherwise. … The suburban newspaper isn’t a fit in this business model.
• After Bush’s resignation announcement in 2014, Versa’s CEO, Gregory Segall, spoke in a press release on what made Bush’s tenure successful: “Under his leadership, the company achieved significant cost synergies by successfully streamlining operations. It also launched new on-line and mobile platforms and introduced a number of creative revenue initiatives.”

tronc/Tribune Publishing

Michael Ferro, tronc/Tribune chief shareholder, Media Companies and Community Journalism

Michael Ferro

In 2007, real estate investor and private equity fund manager Sam Zell purchased the Tribune Co. for $8.2 billion and immediately took the public company private. It went public again in 2014 as Tribune Publishing was officially spun off from the broadcasting assets. The company sought a new owner in 2016, with Michael Ferro becoming the company’s largest shareholder. Ferro, who was previously in charge of the Chicago Sun-Times, rebranded the company as tronc, a shortened form of Tribune Online Content.
From the tronc website:

“We maintain the highest values of journalism while merging that content with an arsenal of digital tools. With them, we can exponentially enhance visual storytelling, catapult our ability to track and engage our audience and offer world-class journalism with a cutting-edge delivery system.
“How are we different?
“No other media company can match the power of our brands and the power of our technology. No other media company surpasses the brilliance of our content and the brilliance of a digital delivery system that makes content easier to consume across every platform. No other media brand is so intellectually distinguished and radically distinct at the same time. And the journey is only beginning.”

Statements made by executives of tronc/Tribune:

  • A 2008 New Yorker article quoted Sam Zell on his rationale for purchasing the company: “It’s not going to change my life style, no matter what happens. It’s likely to change yours significantly.” When the reporter pushed him on the subject of newspaper management, he responded: “You don’t know me, OK? The way I look at transactions, and the way I look at risk, I have no room for sentiment.
  • Also in 2008, a video surfaced online of owner Sam Zell cursing at an Orlando Sentinel photographer in front of hundreds of employees. In the video, he says: “My attitude on journalism is very simple. I want to make enough money so I can afford you. It’s really that simple, OK? You need to in fact help me by being journalists that focus on what our readers want and therefore generates more revenue. . . ..” When the photographer mentioned that readers like stories about puppies, his tirade continued: “I’m sorry, I’m sorry, I can’t – you know, you’re giving me the classic, what I would call journalistic arrogance of deciding puppies don’t count. I don’t know anything about puppies. What I’m interested in is how can we generate additional interest in our product and additional revenue so we can make our product better and better and hopefully we get to the point where our revenue is so significant that we can do puppies and Iraq, OK?
  • In late 2007, Randy Michaels became executive vice president of the Tribune Co. Three years later, the company’s board of directors requested his resignation. A 2010 New York Times article described the rationale for the firing: “Mr. Michaels, who came to the company with a broad mandate for change, alienated many of the company’s employees and some of its advertisers with a nontraditional approach, including many tactics borrowed from radio. Under Mr. Michaels, Tribune, a formerly conservative media company, became known for rugged, profane talk from executives, long, incomprehensible memos from management, and an atmosphere that was depicted in widely published photos of a poker party in the executive offices of Tribune Towers. After a series of negative reports, including one this month in the New York Times, along with the departure of [another top executive] Mr. Abrams, the board has apparently decided that new leadership is needed.”
  • Before becoming the majority shareholder and nonexecutive chairman of Tribune Publishing, Michael Ferro was chairman of Wrapports LLC, which owned the Chicago Sun-Times. In May of 2013, Ferro fired all of the Chicago Sun-Times’ photographers. A Chicagoist article summed up his thinking: “Ferro defended the decision, as expected, but not in the most tactful manner. ‘I am very sympathetic toward [the photographers]. If I were in their shoes, I would feel bad too. It would be like you’re a carriage driver and the cars come and you’re really upset that you can’t have your buggy whip and hit your horse anymore.’ In fact, Ferro says, the photographers should have been let go sooner. ‘I knew the photographers would be going from the day we took this paper over. We took a year and a half too long to do it. … I can tell you 100 percent before we bought this we had that cutlass ready.’
  • A 2013 article in Chicago magazine on Michael Ferro discusses how the Sun-Times, which he owned, has moved away from the civic journalism it had historically practiced: “Less than a month after Ferro arrived, for example, came the decision to end the Sun-Times’ 71-year-old tradition of endorsing political candidates—a tradition that is widely considered essential to the mission of a city newspaper. ‘We have come to doubt the value of candidate endorsements by this newspaper or any newspaper, especially in a day when a multitude of information sources allow even a casual voter to be better informed than ever before,’” the paper said at the time. The move attracted coverage in national media, including The New York Times.
  • A March 2016 New York Times article quotes Tribune CEO Justin C. Dearborn speaking about strategy to shareholders: “During an earnings call, Mr. Dearborn said Tribune Publishing ‘remained focused on consolidation within the legacy publishing industry’ and would consider other acquisitions, particularly if they bolstered the company’s digital capabilities. ‘We will continue to evaluate these opportunities but are only interested in transactions that will be financially accretive and that will add strategic digital sockets,’ he said.”
  • In 2016, Gannett made multiple offers to acquire tronc, which Ferro rejected despite the preferences of shareholder Oaktree Capital Management to sell. A New York Times article describes Ferro’s reaction to the investment firm: “He suggested to top editors and executives that their journalists investigate Oaktree and Bruce Karsh, co-chairman and co-founder of the firm, according to two people with direct knowledge of the meeting. No damaging article about Oaktree was published, but the episode provides a glimpse into the combative business style of a relatively unknown technology entrepreneur who has become one of the country’s most significant and unpredictable media moguls. … In a sign of the growing distrust between Oaktree and Mr. Ferro, the firm is now conducting a review into whether he has been acting out of self-interest rather than doing what is best for shareholders.”

BH Media

BH Media was formed as a newspaper subsidiary in 2011 after Berkshire Hathaway purchased the Omaha World-Herald in CEO Warren Buffett’s hometown. Because Buffett delivered papers as a teen, he instituted an annual companywide competition in which employees throw newspapers onto a house’s front porch, with a prize for anyone who beats Buffett’s accuracy. In 2012, BH Media expanded its portfolio by buying Media General’s newspapers. BH Media is a small portion of Berkshire Hathaway, which also has investments in insurance, railroads, financial services and energy.

From the BH Media website:
“A sense of community. That is what BH Media provides. We do it with award-winning daily and weekly newspapers. We do it with websites that consistently draw the most users in local markets. And, increasingly, we do it through mobile channels that reach consumers on the go. Our multiple news platforms educate, explain and entertain. From decisions by the local government to extraordinary performances by area high school sports teams to special offers from neighborhood businesses, BH Media excels in helping you connect to your community.

“Simply put, our goal is to be indispensable. To do that, we rely on experienced reporters, photographers and editors generating a news report that informs. We turn to our seasoned account executives and sales managers providing solutions that help local businesses grow. We also look for opportunities to support events and causes that uplift our localities.”

From statements made by Warren Buffett, CEO of Berkshire Hathaway:

Warren Buffett, Berkshire Hathaway & BH Media, Acquisition of Local News

Warren Buffett

  • In Berkshire Hathaway’s 2012 annual report, following the creation of BH Media in late 2011, Buffett wrote: “Charlie and I, however, still operate under economic principle 11 (detailed on page 99) and will not continue the operation of any business doomed to unending losses. One daily paper that we acquired in a bulk purchase from Media General was significantly unprofitable under that company’s ownership. After analyzing the paper’s results, we saw no remedy for the losses and reluctantly shut it down. All of our remaining dailies, however, should be profitable for a long time to come. At appropriate prices – and that means at a very low multiple of current earnings – we will purchase more papers of the type we like.
  • In a 2013 interview with USA Today, Buffett said: “Our papers are doing OK. They’re in midsized cities. I think it’s tougher, frankly, when you get into really big metropolitan areas. … I think a newspaper has to be primary as a news source to a community. And I think it’s very tough in a New York City or a Los Angeles. It’s a lot easier in a Tulsa, Okla., or a Greensboro, N.C. We have been focused on those kinds of papers, and we will buy more.
  • A 2014 Wall Street Journal article summed up BH Media’s approach to newspapers: “The newspapers are profitable – Mr. Buffett said at Berkshire’s 2013 annual meeting that he is targeting an after-tax return of at least 10% on his newspaper investments – and the billionaire has shown a willingness to shutter poor performers: In 2012, Berkshire closed the News & Messenger of Manassas, Va., because it was losing money in a competitive market.”
  • The same Journal article noted: “Since these deals don't materially affect the conglomerate's results, shareholders are more willing to indulge Mr. Buffett even if newspapers don't exactly fit the profile of Berkshire businesses. ‘It doesn't involve a lot of capital, and it's an area that's close to his heart,’ said Jeff Matthews, a hedge-fund manager who has written books about Berkshire. ‘He sees a part that Berkshire can play, and he's got no competition’ from other buyers. Mr. Buffett declined to comment.”
  • In a 2016 interview with Rem Rieder of the USA Today, Buffett gave an update on BH Media’s newspaper operations, raising uncertainty about the future: “’We haven’t cracked the code yet’ as far as a viable business plan is concerned, he told me, speaking about his own holdings and the industry as a whole. ‘Circulation continues to decline at a significant pace, advertising at an even faster pace. The easy cutting has taken place. There’s no indication that anyone besides the national papers has found a way. … They [newspapers] don’t tell me as much news as three years ago, let alone 10 years ago,’ he says. ‘They are a fair amount worse off, and not one is bucking that trend, even in prosperous communities. There’s less and less in the newspaper.’ Buffett, who has owned The Buffalo News since 1977, stresses that all of his newspapers are profitable. But the trendlines are discouraging. … The ‘code’ that he likes to allude to involves figuring out how to make much more digital revenue, ‘blending the digital and print model,’ as Buffett puts it. What concerns Buffett is that ‘it’s three years later and we’re still figuring out a solution.’ He adds, ‘I’ve got to see the answer. Wishful thinking won’t do a thing.’ As for the future, he says, ‘in most cases there are some years left to crack the code. But we haven’t done it. Maybe (the industry) started too late.’”

10/13 Communications

10/13 Communications was formed in 2009 through a partnership between 10k Investments and 13th Street Media. According to the company’s website, “the objective is to pursue acquisitions meeting specific criteria with a focus on strong, local media.” 10/13 Communications owns newspapers in Arizona and Texas.

From the 10/13 Communications website:

“1013 Communications is not your run-of-the-mill media company. Our innovative publications, including the Pulitzer Prize-winning East Valley Tribune, fill a distinct niche in our Arizona and Texas suburban markets — one that is not being met by more traditional media sources. Our papers boast hyper-local reporting and innovative distribution models. We are tied to our communities through our papers' histories and reputations. We offer local and national advertising opportunities through our traditional newspapers and printed publications, as well as electronic media such as internet and phone applications.”

From statements by executives and other publications:

  • A 2007 guidebook for managing newspapers from 13th Street Media, one of the predecessors to 10/13 Communications, surfaced online in 2014. It details the business strategy that managers were expected to adhere to, which prioritizes advertisers rather than the news operations of their papers: “Our customer is the advertiser. Readers are our customers’ customers. … Sales are the lifeblood of the company. Sales calls are the primary contributing factor toward sales, so it is clear that the top priority at all of our newspapers is the sales department. Staffing levels should be as high as possible in sales and as low as possible in all other areas.”
    vIn 2009, the Phoenix New Times described owner Randy Miller as having “a reputation for soft news and advertiser-friendly journalism – that’s in addition to his reputation as a guy who knows how to turn print and web media into a cash machine.”

    Randy Miller, Phoenix New Times Owner, Journalism & Advertising

    Randy Miller

  • In 2014, the disgruntled former editor of the East Valley Tribune, which 13th Street Media purchased in 2007, wrote a blog explaining why he would rather be unemployed than work for Randy Miller: “In 2007, four of the best small newspapers in Arizona were the Explorer in Oro Valley, the Daily News-Sun in Sun City (Phoenix), the Ahwatukee Foothill News in south Phoenix (or west Chandler, if you prefer), and the East Valley Tribune in Mesa. By 2012, they were four of the least regarded, least useful, least newsworthy and least trusted newspapers in Arizona. What changed? They were all purchased and gutted by 13th Street Media (which has now become 10/13).”
  • The company’s 2015 media kit for advertisers explains what the company sees as its selling points, demonstrating its advertiser-friendly focus: “We deliver local news to targeted communities. We deliver the customers you want, where you want. We deliver more customers in the zip codes you need. We deliver local focus in our communities. … We deliver results you need and return on investment.”