Reports say bids in for Weather Channel

NORFOLK

Landmark Communications Inc. provides news from Norfolk to Las Vegas and weather updates nationwide, but the media company is communicating little about the potential sale of its properties.

Landmark executives announced in January that they had hired two investment firms, JPMorgan and Lehman Brothers, to explore selling the divisions of the privately held company, including The Weather Channel and The Virginian-Pilot.

Last week, The New York Times and Reuters news service reported that initial bids for The Weather Channel, Landmark's largest cash producer, were due by Monday. Citing unnamed sources, they said a half-dozen companies had expressed interest, including CBS Corp., NBC Universal, Comcast Corp. and Time Warner Inc.

In an interview Monday, Richard F. Barry III, the vice chairman of Landmark, declined to answer more than two dozen questions about the sale, including possible suitors, the target price or even the deadline for preliminary Weather Channel bids.

"These things will unfold in due course," Barry said. "We will make announcements at the appropriate times."

Barry said, though, that the initial forecast that the transactions would be completed by summer's end is still a "reasonable expectation."

He also declined to provide a timetable for the sale of The Pilot. However, Bruce Bradley, the newspaper's publisher, told about 80 people at a breakfast Wednesday sponsored by the Downtown Norfolk Council that the "books," or financial prospectuses, for The Pilot and other Landmark newspapers were still undergoing revisions.

Bradley said the sale of The Pilot was contingent on reaching a minimum price, which he did not identify.

John Morton, a newspaper-industry analyst in Silver Spring, Md., said the sale of The Pilot seemed "a little slow" compared with those of most daily papers, which he said tend to take two to three months.

The typical process, he explained, was that after the books are produced, two rounds of bids occur. After the first round, the seller evaluates the offers and often invites the top two or three to bid again, Morton said. "They know they're among the finalists," he said, "but the company wants to see how much they really want it."

Landmark Communications employs more than 9,000 people, and its revenue exceeded $2 billion last year. Its most lucrative property, both insiders and analysts said, is The Weather Channel and its associated properties, including its Web site, weather.com. The Weather Channel, which recently celebrated its 25th anniversary, reaches about 97 million households.

Decker Anstrom, Landmark's president and chief operating officer, has been quoted as saying $5 billion is a "fair" price for The Weather Channel properties, but some analysts have said the estimate is high.

Landmark also owns:

- More than 100 other daily, weekly and military newspapers, including The Roanoke Times.

- Television stations in Nashville, Tenn., and Las Vegas.

- Dominion Enterprises, based in Norfolk, an assortment of publications and Web sites in areas such as real estate and employment. In January, Landmark Chairman and Chief Executive Officer Frank Batten Jr. said Dominion Enterprises was the company's second-largest profit producer.

Batten declined then to disclose the reason for the prospective sale. Barry would not elaborate Monday.

"It's a private company," Barry said. "This company traditionally keeps its affairs closely held. There is nothing new about that."

For The Pilot, Morton said, the most likely buyer would be a company "that owned properties with some geographic connection" or one that acquires newspapers in the Southeast. But, he added, "somebody could come out of nowhere, a private equity firm, like the one that emerged to buy the Minneapolis Star-Tribune" last year.

Media General Inc., which owns the Richmond Times-Dispatch, has bought papers in the Southeast, but "I don't know if they're in the mood to do that right now," Morton said. He said he doubted The Washington Post would make a bid "because it has not been interested in buying newspapers for decades."

Spokesmen for Media General in Richmond and The Washington Post Co. declined Monday to say whether their companies had any interest in The Pilot, saying they do not discuss potential acquisitions.

Alan Breznick, an analyst for Heavy Reading, a New York communications research company, called The Weather Channel "a big catch. It's one of the last independent cable programmers. It's a big cash cow."

Breznick, based outside Toronto, said NBC and Time Warner might be among those interested in The Weather Channel. NBC "has been very acquisitive in the cable area," he said, and Time Warner could view the channel as an ideal complement to its Cable News Network.

"I hope whoever gets it doesn't mess it up," Breznick said, "because I'm a fan of The Weather Channel. I like watching the maps and seeing the storms and seeing those geeky meteorologists get all excited when a new snowstorm hits."

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com