This news is low in Digital First Media CEO John Paton’s memo to employees:
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.
Apollo Global Management was expected to acquire the newspaper chain.
Also: “In light of the strong trajectory the Company is on, John [Paton] has decided that the time is right for him to dedicate his efforts on a full-time basis to IVA Ventures.” Chief operating officer Steve Rossi replaces him.
Date: May 14, 2015 at 10:03:36 AM MDT
Subject: IMPORTANT Message From John Paton and Steve Rossi
(On behalf of John Paton & Steve Rossi)
As you all know, it is earnings season and we are seeing others in our industry report on their financial performance. While our fiscal year does not end until June 30th, we can see how it will finish and we thought this was a good time to update you on news at our Company on this and other fronts.
To begin, for DFM, it has been a strong year in a difficult environment. In short, because of you this Company has real, demonstrable momentum. Year-to-date we have:
* Increased our operating profit versus last year, enabling us to deliver on our goal of providing profit sharing for all eligible employees;
* Delivered nearly $200 million of digital ad sales; and
* Expanded our AdTaxi digital platform, both internationally and with large newspaper, television station and ad agency partners in 166 cities and 6 countries./CONTINUES
These results demonstrate that our strategic game plan is working: we are building scale, carefully controlling expenses and investing in the digital future. At the same time, 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.
None of this success could happen without you.
You will recall that back in September, DFM announced a strategic review process – meaning we would look at all of our options for the future, including potentially the sale of DFM as a whole or in regional clusters, or the continued execution of our business plan. While the review process is not complete 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. Our performance is driving our digital future and increased profitability, and our essentially debt-free structure has given us a lot of options, which we will continue to explore. We will keep you updated on our plans, including when the strategic review process has concluded.
In addition, we wanted to let you know that in light of the strong trajectory the Company is on, John has decided that the time is right for him to dedicate his efforts on a full-time basis to IVA Ventures. IVA Ventures is a company that actively seeks strategic investments in seed, early and growth stage digital media start-ups aimed at accelerating the digital transformation of legacy media companies. We expect to have an ongoing working relationship with IVA Ventures in identifying cutting-edge products to accelerate our digital growth. John will remain CEO until our fiscal year end which ends on June 30 before taking up his new position, at which time Steve will assume leadership of DFM.
We are both deeply grateful for all of your terrific work and want to express our sincerest thanks for your contributions to the momentum underway at DFM. Let’s keep doing what we are doing and keep our performance strong.
John and Steve