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75% Stake in Press Herald Parent Sold to Financier/Philanthropist/Congressional Spouse
03/27/2012   Reported By: Tom Porter

Maine philanthropist Donald Sussman has purchased a 75% stake in Maine Today Media - the financially troubled owner of the Portland Press Herald and two other daily newspapers, for $3.3 million.

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It's part of a restructuring plan announced today designed to help MTM get back on track as the state's largest media company, and as Tom Porter reports, it's not quite the deal Sussman was hoping for.

Hedge fund manager and philanthropist Donald Sussman of North Haven, had previously announced that his company Maine Values would lend $3.3 million to Maine Today Media in exchange for a 5 percent stake. However, according to a press release issued by MTM, institutional investors, including out-of-state pension funds, wanted some "structural changes" to the package.

Under the terms of a financial deal announced Tuesday, Sussman, who's married to Maine Democratic Congresswoman Chellie Pingree, is handing over the same sum of money, but it will be used for a straight purchase of 75 percent of the company's stock.

MTM's chief financial officer Pat Sweeney said there was a good reason for this."It was principally to keep the debt on the company books to a minimum," he said.

Sweeney would not comment on what the debt situation now is facing the company, but he described the restructuring as a strong business deal that funds a "broadly supported long-term growth plan."

"Our goal is to transform the company from a print-centric company to a digital-centric company," said Sweeney.

But Sweeney stressed this does not mean the imminent demise of MTM's 3 flagship ink-and-paper offerings: the Portland Press Herald, Morning Sentinel and Kennebec Journal. Nor are there concrete plans yet to start charging users for accessing online news sites.

"We don't know when or indeed if we'll go to a paywall but it's certainly being discussed now," Sweeney said.

Before the deal was made, Texas-based HM Capital Partners had been a majority shareholder in Maine Today Media. Sweeney wouldn't say how much of the company they own now, only that it was the majority of the 25% not now owned by Sussman.

Donald Sussman said in a statement that he would have preferred the original deal. But at the end of the day, he said he simply wasn't willing to abandon what he described as an "important community resource and the hundreds of good jobs that come with it."

Sussman - who donates money to democratic and liberal causes, among other things - also stressed that he would have no editorial input into what the paper writes about.

But, distance himself as he may from the news operation, Sussman's involvement in the media company will inevitably cause some suspicion, at least according to journalist and blogger Al Diamon, who monitors Maine's media landscape for Downeast Magazine on his blog Media Mutt.

"There's not going to any coverage of Pingree or any of the issues that Sussman is involved in, that isn't going to be suspect with a fair-sized segment of the population," said Diamon.

Of even bigger concern, he said, is how well MTM - which has 364 employees - is able to recover from the financial problems that last year left the company insolvent and forced it into making further job cuts. Another financially burdened newspaper chain in midcoast Maine, Village Soup, closed up shop recently, but is scheduled to re-emerge under new ownership next month

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