Martha’s Vineyard Gazette sold to KKR co-founder Kohlberg
I’ve always been thankful that my grandparents were good at playing the real estate game. Among their unlikely coups was buying a house in the 1960’s in Edgartown, the tony enclave on the island of Martha’s Vineyard, whose exclusive address had no correspondence to their income level. If they hadn’t bought it, there’s no way that my journalist’s salary would have been able to scoop up property like that. In the more than three decades that I’ve been going there, I’ve become a regular reader of the Martha’s Vineyard Gazette, the enormous broadsheet newspaper that has resisted the cost-cutting size reductions that many other newspapers in the United States have sustained.
That allegiance to the paper (and its weekly competitor, the Martha’s Vineyard Times), as well as my continuing nostalgia for my former media beat — the future of newspapers, publishing and journalism — made it all the more interesting when I read on Friday that the Reston family is selling the 164-year-old paper to Jerome Kohlberg. It’s the story that has it all for a business reader, really: Daily paper, read by rich and powerful residents who are captains of the financial world (and hopefully Reuters clients), sold to a true bigwig of the private equity world, and a strange connection to The New York Times to boot.
Richard Reston took over editing and publishing the paper, as the Times’s Jacques Steinberg relates in this 2003 story, after leaving the Los Angeles Times where he was a foreign correspondent with stints in Northern Ireland, the Soviet Union and Vietnam. His family has owned the paper since 1968, as the Vineyard Gazette reports here, when the late James “Scotty” Restonbought it from Henry Beetle Hough. Scotty Reston, of course, was a top editor at The New York Times for many years. ((In a bit of Vineyard cultural trivia, the Gazette has long been seen as the newspaper of the tourists and the seasonal visitors, while many year-round islanders favor the Times).
What strikes me as odd is the choice of buyer: Jerome Kohlberg, who co-founded the private equity firm Kohlberg Kravis Roberts, has another connection, once-removed, to The New York Times. Kohlberg’s son was nominated to that company’s board by Phil Falcone, the hedge fund manager at Harbinger Capital Partnerswho amassed a half-billion dollar’s worth of New York Times shares in a bid to shake up the company’s management and operations. Ultimately, Kohlberg’s son James did get nominated to the board, but Harbinger’s bet on the Times did not work out. The stock price tanked after Falcone’s move, and Harbinger since then has reduced its stake from about 20 percent to, as of this week, just above 2 percent. Kohlberg is still on the board, though Scott Galloway, the investor who came up with the Harbinger plan, has moved on.
Jerome Kohlberg is 85 and has been visiting the island from his Mount Kisco, New York home since 1943. He also appears to be taking a more friendly approach to his foray into newspapering. Here’s an excerpt from the press release:
In a separate transaction, a gift has been made to Martha’s Vineyard Preservation Trust from a fund established by the Kohlbergs, to buy and preserve the Revolutionary War-era Gazette building and property on South Summer Street in downtown Edgartown. The Trust is a non-profit organization dedicated to preserving and managing island landmarks. It is anticipated that the newspaper will continue to operate from the historic building under a lease to be negotiated with the Trust.
And as the Vineyard Gazette reports, the Trust will get $1.5 million. As for the paper and the real estate, that will cost $3.5 million. Maybe hostile takeovers don’t necessarily run in the Kohlberg family.