There's a new twist in the story of the investment in Maine's largest newspaper by money manager Donald Sussman, the husband of Maine Democratic Congresswoman Chellie Pingree. When the deal was first announced, it was described as a loan of "$3 million to $4 million" in exchange for one board seat and 5% of equity. The Portland Press Herald reports on its own new owner:
Sussman had planned to lend the company $3.3 million, acquire a 5 percent equity stake in the company and gain a seat on the board of directors. The financial structure changed, however, during final negotiations.
Institutional investors, including out-of-state pension funds, asked for important changes to the original package announced in February. Sussman's financial contribution still adds up to the same amount of money, $3.3 million. But instead of a loan, the money is being used for a straight purchase of private stock. The result is that Maine Values will have a 75 percent ownership stake in the company, rather than 5 percent.
It depends on what the obligations are going forward in terms of union contracts and pension obligations, if any, but, on the face of it, $3.3 million for a 75% stake in the Portland Press Herald and whatever internet and associated smaller local publications are part of the company is potentially a pretty good deal, even for an investor who isn't the husband of a congresswoman. If it had been a Maine government agency, rather than a newspaper, announcing one deal for the public and other potential bidders to react to and then going through with the deal on dramatically different terms, I'd bet the Portland Press Herald would be among those loudly objecting to the bait and switch.