A six-year-old online news startup has agreed to buy the Anchorage Daily News, the largest daily newspaper in Alaska, from the McClatchy Co (MNI.N) for $34 million, the two companies announced on Tuesday.
The sale of the newspaper to Alaska Dispatch Publishing marks the first time a local news upstart has purchased the local daily newspaper in its market.
Alice Rogoff, publisher of the online-only Alaska Dispatch, said the deal was meant to serve Alaskans, many of whom still read a print newspaper.
"Advertisers still view it as a useful medium," she said.
Rogoff, a former chief financial officer of U.S. News and World Report, said Alaska Dispatch plans to produce more news in print and online with the purchase of the newspaper.
McClatchy, based in Sacramento, California, said it decided to sell the paper, which has daily circulation of 42,293 and Sunday circulation of 46,354, after being approached by Rogoff.
Pat Talamantes, McClatchy's president and chief executive office, said in a statement that the newspaper is profitable.
"We weren't looking to sell the Daily News, but after Alaska Dispatch Publishing approached us, we saw advantages to local ownership in this case and opportunities for consolidation that would strengthen both news organizations," Talamantes said.
Several daily newspapers have changed hands over the past 12 months including The Washington Post, which sold to Amazon (AMZN.O) founder Jeff Bezos for $250 million, and The Boston Globe, which was purchased by financier and Boston Red Sox owner John Henry for $70 million.
Newspapers have been racked with challenges over the past decade as more and more people forsake print editions in favor of online editions. Even as online readership has increased, advertising rates have not kept pace with print editions and publishers have struggled with falling revenues.
Alaska Dispatch was co-founded by Tony Hopfinger, Amanda Coyne and Todd Hopfinger in 2008. Rogoff became the majority owner in 2009.
The deal, which is expected to close in May, includes the Anchorage Daily News, its website and the newspaper's real estate. After the purchase is completed, Alaska Dispatch will sell the real estate assets to a private local buyer.
McClatchy said that following the sale, it will publish 29 daily newspapers in 28 U.S. markets in 14 states.
Kevin McClatchy, the company's chairman, said: "This sale not only makes sense from a local ownership perspective, but it also allows McClatchy to focus more resources on accelerating our digital transformation to better serve our communities."
(Reporting by Jennifer Saba in New York; Editing by Leslie Adler)