October 2006
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Copley Press to sell Peoria Journal Star

The Journal Star reports this afternoon that their parent company, Copley Press, is selling all its newspapers in Illinois, which includes the Peoria Journal Star, Galesburg Register-Mail, Springfield’s State Journal-Register, and the Lincoln Courier:

Journal Star publisher John McConnell revealed the news to employees at a 1 p.m. companywide meeting today.

Copley said in a midday release that those papers, along with three in Ohio, will be subject to “possible mergers, sales or other transactions.”

[…] A company spokesman said the company’s decision to sell the Illinois and Ohio properties was affected by both a contraction in the newspaper business and by a looming inheritance tax related to the death of Helen Copley in 2004. Her sole surviving son David is CEO of the company.

[…] The announcement was met with stunned silence by Journal Star employees, many of whom recalled hearing about 11 years ago that the Journal Star, after more than a century of family ownership, was for sale. It was eventually acquired by Copley.

Wow. I don’t know what to say, except that I sincerely hope the employees are treated well.

14 comments to Copley Press to sell Peoria Journal Star

  • MDD

    The stunned silence by the Journal Star staff is fitting as most are probably ultra-liberals and wrote articles against dropping the inheritance tax in the past. It’s about time some libs get what they asked for. High tax rates do not create jobs.

  • Glad I just sent in my yearly subscription fee before the prices go up. It will be interesting to see what happens. Does anyone recall any large changes after they were sold previously?

  • Guy who hates welfare

    Only time will tell C.J.- Newspapers are bought and sold all the time, with different issues and stances and political slant-so it probably lies where the viewpoints are.

  • justanobserver

    Wonder if Lee Enterprises is a likely buyer. They own papers in Bloomington, Carbondale, Decatur, Charleston, Mattoon and DeKalb. Peoria, Springfield, Lincoln and Galesburg would seem like a natural fit, plus they would save a lot through consolidation, etc. Unfortunately, that doesn’t bode well for PJS employees.

  • Wasn’t the PJS employee owned for a while?

  • justanobserver

    The following is from a paper posted on-line that analyzes employee ownership of newspapers. It lists the Journal Star as a failure since the paper eventually had to be sold:

    10. Peoria, Ill. ­ In 1984, publisher John T. McConnell began to turn the Journal Star over to his employees, confident that their agreement would make it difficult for employees to ever sell the daily.[87] The Journal Star was the first U.S. daily to create an Employee Stock Ownership Plan (ESOP), and experts said it could serve as a model, showing “the dwindling roster of about 375 independent newspapers how to stay locally owned and successful.”[88]
    Peoria’s Journal Star remained independent only 13 years, primarily because its employee-ownership plan was too generous. For each $50 an employee invested in its stock, the company contributed an additional $150. The price of each share rose from $39 in 1983 to $207 in 1996, and some employees decided to retire early.[89] The company did not have enough money to buy back every share and, in 1996, sold the Journal Star to the Copley Press for $174.5 million.

  • cgiselle12

    MDD – The day I feel bad that some wealthy family is being “adversely affected” by the inheritance tax is the day that same family has to borrow money from relatives to buy their kids’ halloween costumes so they can still eat that week.
    Sure we all have our problems, but so many conservatives have lost a sense of scale. Like feeling bad when Ken Lay’s wife complained about “fighting to stay liquid.” Sure we all have our problems and I’m not denegrating anyone’s concerns. But conservatives need a does of reality when it comes to the inheritance tax. I have no problem asking multimillion dollar families to pay larger sums of taxes to help the government operate, even if it involves selling off pieces of their billion dollar companies. I won’t shed one damn tear.

  • From the Journal Star’s website:

    On March 26, 1984, an employee trust, established by the board of directors, purchased the first 22.6 percent of the Journal Star company stock. It was the first step in a 10-year buy-out, after which the employees will become the sole owners of the newspaper.

    By 1990, the Employee Stock Ownership Plan (ESOP) trusts, which hold the company shares, control held about 83 percent of all stock.

    The Journal Star purchased the Galesburg Register-Mail in 1989.

    When the Journal Star was offered for sale in September, 1995, the ESOPs owned 91 percent of the stock.

    The Journal Star merged with The Copley Press, Inc. in July 1996, ending 13 years of employee ownership and 141 years of local ownership at the Journal Star.

    Henry Slane retired and John McConnell remained as publisher.

    JS officials said that the ESOP was so successful some employees were taking early retirement and causing cash flow pressures. Dozens of investment and media groups looked at the company before Copley emerged as the high bidder.

  • After looking at Lee Enterprises, I think it’s a good bet that they’ll be a contender. They now own the St. Louis Post-Dispatch and it’s making money….

  • cgiselle12,

    The Copely family will be ok and fine. You shouldn’t need to worry about them.

    But for the estate of Helen Copely to pay it’s estate tax, it appears that some of the assets of that estate are required to be sold to raise the cash needed. The Journal Star is one of those assets. The employees of the Journal Star are now concerned about their jobs and future as there is no guarentee what a new owner might do.

    About 13 or 14 years ago, I saw something similar happen to a family farm. These people were by no means multi-millionaires (at least not cash wise, but the land value was high). While they did receive some life insurance, it was not enough to satisfy the payment of inheritance tax. While they were able to parcel off a small section of land to retain, they had to sell most of the farm to pay the tax. Ask them what they think of the inheritance tax.

    I will agree many conservatives want to go too far in estate tax repeal, but IIRC, it was an uphill battle with Democrats to raise the exemption from 600k to 1 million. Many liberals thought that was too much. The current relieve from estate tax is only temporary and something needs to be done to help family farms and small business owners survive such hardship. While the Copely family will still being doing well, the payment of it’s estate tax is leaving a wake of uncertainty here in Peoria.

  • MDD

    cgiselle12 – You miss the point and you have no apparent idea of the amount at which the inheritance tax STILL kicks in, ruining even relatively small inheritances and jobs for precisely the reasons mentioned above. Instead of everyone posting the 2006 amount that it kicks in at as well as the progressive percentage of the tax as the left amounts get higher and higher, try doing some searches for inheritance tax… It sucks that a tax may end up putting people out of work.

  • Giselle: Certified Class Warrior.

  • Martha

    You get your paycheck, and your income has already been taxed.

    You save a portion of your check, and your savings dividends are taxed.

    You buy property, and your property is taxed. In some states, even your personal property (e.g. cars) is taxed.

    You spend your money, and you pay taxes for that which you have just purchased.

    You invest your money, and your investment earnings are taxed.

    You retire and receive Social Security, and your earnings are taxed.

    Throughout your life, there isn’t one thing you can do with your money, aside from burying it in your backyard or hiding it in your mattress, that the government doesn’t take some of it in taxes. And the more you earn, the more the government feels it’s necessary and acceptable to tax. I’m not certain of the exact statistics, but I think it’s something like the top 10-15% of wage earners are 85-90% of the income taxes.

    At what point does enough become enough? At what level of double-, triple-, and quadruple-taxation is it ok to say, “You’ve paid your fair share of the taxes thoughout your life, so now that you’re dying, you no longer have to pay anymore. Your beneficiaries can keep their inheritances and not be bothered by the government.”

    I guess for some people it’s never enough.

  • Well said, Martha. Now get the Democrats and left leaning Republicans to agree. Class warfare? Probably.