Black Press appears poised to sell Victoria building

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      Postmedia isn't the only publishing company that's putting its real estate up for sale.

      The Victoria Times Colonist has reported that Black Press is about to close a deal to sell its 30,000 square-foot building in the 800 block of Broughton Street. (That's one block up the street from the Victoria Public Library central branch).

      According to an article by Andrew Duffy, Black Press listed the building and adjacent parking lot for $7.65 million.

      The buyer, developer Dave Chard, has not revealed the price, noting that the deal won't close until the end of November.

      Black Press will reportedly remain on the premises as a tenant over the short term as Chard seeks rezoning for a condominium development.

      Black Press publishes community papers across the Lower Mainland, including the North Shore Outlook, various editions of the Leader, West Ender, and Richmond Review. It also owns papers in other parts of B.C., Alberta, and the United States. 

      In the summer of 2012, Black Press chairman David Black generated a great deal of media attention when he expressed interest in building a refinery near Kitimat. This would be to refine oil that could be transported through the proposed Northern Gateway pipeline. 

      This came two months after Standard & Poor's had dropped its outlook on Black Press from B/stable to B/negative because of "ongoing headwinds the company faces with revenue and profitability declines".

      This was in part because of "refinancing risk with its senior secured bank facilities", which matured in August 2013.

      Moody's Investors Service also downgraded Black Press's rating around the same time.

      Then in November 2012, Standard & Poor's cut Black Press's credit rating to B- "based on our view of the company's ongoing organic revenue and profit declines, as well as refinancing risk".

      However, the two ratings agencies improved their outlook this summer.

      In July, Standard & Poor's maintained the B- rating, but revised its outlook upward from "negative" to "stable".

      The same month, Moody's Investors Service revised Black Press's rating from "under review" to "stable".

      Here's the rationale, as stated on the Moody's website:

      Black Press' B3 CFR reflects high business risk resulting from secular industry pressures and vulnerability to cyclical advertising spending, and the company's acquisitive growth orientation, which could cause its leverage to increase (adjusted Debt/EBITDA was 4.8x at fiscal yearend 2013). While the American newspaper operations have shown some improvement, the Canadian newspapers and commercial printing operations, which make up more than 70% and 80% of total revenue and EBITDA respectively, have recorded weaker results than anticipated, driven by negative secular trends in the newspaper publishing industry and soft economic conditions. These trends are expected to continue as print advertising shifts to digital platforms. The rating benefits from the company's good market position in western Canada, positive free cash flow generation and continued focus on debt reduction. The rating also reflects the company's discipline around cost reduction which has helped to maintain adjusted EBITDA margins around 20%. Also, assets outside the restricted group that generate about $20 million of annual EBITDA add a measure of diversity to Black Press' asset base.

      The outlook is stable because Moody's expects Black Press to continue to generate positive free cash flow to repay debt despite the challenges facing the newspaper publishing industry.

      An upgrade in Black Press' rating could be considered if the company reverses the decline in revenue and sustains adjusted Debt/ EBITDA towards 4x and EBITDA - Capex/ Interest above 2x. Black Press' ratings would be downgraded if free cash flow generation remains negative for an extended period or if deterioration in revenue and earnings should cause adjusted Debt/EBITDA to be sustained above 6x. A material debt-financed acquisition could also lead to a downgrade.

      The principal methodology used in this rating was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Please see the Credit Policy page on for a copy of these methodologies.

      Toronto-based Torstar Corp., which publishes the Toronto Star, owns almost 20 percent of Black Press.




      Sep 28, 2013 at 11:23am

      Does this mean partisan media outlets like Black Press with a clear conservative (neoliberal) bias are a bad investment!

      Also, fallout from the 2008 financial crisis provided ample evidence that the aforementioned ratings agencies were not removed from having their own conservative partisan bias'. Meaning, they did not downgrade enough, some of the largest financial players before they went bankrupt.

      Sounds like it might be a good time to divest of Black Press stock.

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      Charlie Smith

      Sep 28, 2013 at 7:47pm


      Black press is privately held, so it might be difficult, though not impossible, for anyone to sell the shares.

      Charlie Smith

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      Bob Woodward

      Sep 30, 2013 at 7:54am

      David Black might as well be out of the paper business since he got involved in that Kitimat scheme. In fact, I'd say he lost steam after his failed bid to buy Post Media. His newspaper chain is starting to look like a neglected kid. I think letting go of the head office in Victoria is a signal that he's letting go of the business altogether. It would be interesting to see how Glacier Media, Black's chief competitor, is doing since acquiring Post Media's community division. It got the thoroughbred it wanted in the Times Colonist but all those other nags in the community newspaper stable went with it.

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      Sep 30, 2013 at 8:17am

      This is the Internet age daily Newspapers are Dinosaurs.

      Viva la Straight!

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      Sep 30, 2013 at 12:17pm

      Bob, you have it backwards. The nag in the stable is actually the TC. You might be surprised to learn how successful the smaller community papers are. Many of the dailies are in trouble because of high overheads, including wages, large buildings they no longer fully occupy, printing and distribution costs and other factors. The small community papers have held up well in the Internet world because of their commitment to local content. That strategy is one the dailies would be wise to emulate.

      Bob and others should not read too much into the sale of the Broughton St. property. It's a valuable asset that is being under-utilized and therefore it makes sense to unload it when there is a buyer ready to lay out a few million bucks.

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      Chuck Norris

      Oct 2, 2013 at 9:28pm

      Sorry but at least 1/2 of Glaciers community papers are currently in the red; the other 1/2 that are profitable are slowly becoming less so.
      Black's network of community paper by in large are better positioned.
      The sale of the Victoria paper allows for the accusation of more newspapers. Property was purchased about 15 years ago for around 2.5M.
      Buy failing papers; reduce staff & implement the Black systems & poof instant profitability.
      Glacier borrowed heavily to buy the Post group; over payed on pure ego to increase their network size. Publicly traded = answering to a board= no options but to scalp. Sell those shares for a small lose over what they will be worth in a year or 2.

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