August 6, 2009 / 5:32 PM / 11 years ago

UPDATE 1-Cox won't sell Austin American-Statesman newspaper

NEW YORK, Aug 6 (Reuters) - Cox Enterprises has taken the Austin American-Statesman off the market after failing to get satisfactory offers for the daily newspaper, the company said on Thursday.

The Statesman will operate under the Cox Media Group, a unit of the Atlanta-based Cox Enterprises.

“This is a profitable company, and it just did not make sense to sell it for the prices offered,” the paper’s publisher, Michael Vivio, said in an article on its website.

The privately held Cox, whose largest paper is the Atlanta Journal-Constitution, put the American-Statesman up for sale along with 28 other papers to raise cash to pay off debt.

The American-Statesman had attracted interest from several parties, including private equity firm ZelnickMedia Corp, run by Strauss Zelnick, chairman of video game publisher Take Two Interactive Software Inc (TTWO.O).

Cox had sought about $200 million for the paper, sources previously told Reuters; but the value likely has fallen since earlier this year because of advertising revenue declines hurting most newspapers and traditional media companies.

The company has found buyers for other, smaller papers on the market, including the Waco Tribune-Herald in Texas and The Daily Sentinel in Grand Junction, Colorado.

The market for U.S. newspapers has cooled in recent years, following big deals such as McClatchy Co’s (MNI.N) purchase of Knight Ridder and Lee Enterprises Inc’s (LEE.N) purchase of the Pulitzer newspaper chain.

Those deals came just before advertising revenue began a precipitous slide at many U.S. papers, mainly because more people get their news for free online. Ad revenue has tanked in the past year, also because of the financial crisis, making already troubled papers an even more difficult buy.

Some papers have closed, including Hearst Corp’s Seattle Post-Intelligencer and EW Scripps Co’s SSP.N Rocky Mountain News. New York Times Co (NYT.N) had threatened to close The Boston Globe if it could not get its unions to agree to cost savings. It is seeking a buyer for the paper. (Reporting by Robert MacMillan, editing by Gerald E. McCormick)

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