PORTLAND — MaineToday Media has completed its financial restructuring plan with Maine Values LLC, which is owned by financier and North Haven resident S. Donald Sussman.

The finalized deal clears the way for MTM to repay debt and move ahead with ambitious plans to restore its role as the state’s leading media company. These proposals involve moving from a legacy newspaper print company to one that operates and derives revenue from multiple platforms, including online enterprises.

“Across the board, our people are ready to move into a new time of growth for MaineToday Media and provide our readers with exceptional news coverage,” Neil Heyside, the company’s interim CEO, said in a statement.

MaineToday Media owns and operates The Portland Press Herald/Maine Sunday Telegram, the Kennebec Journal in Augusta, the Morning Sentinel in Waterville and the Coastal Journal in Bath, along with digital properties including mainetoday.com, Maine Jobs and Raising Maine.

Sussman is one of the state’s leading philanthropists and political donors. He is married to U.S. Rep. Chellie Pingree, D-Maine. In a written statement, Sussman reiterated a previous pledge not to interfere with newsroom or editorial operations.

“I’m a businessman, not a newspaper editor,” he said. “I have tremendous faith in the editors and newsroom staff who have been hired by previous owners. They are dedicated journalists who will continue to do their jobs professionally and independently. They report the news thoroughly and fairly, and I’m not going to interfere with that in any way.”

Completion of the deal with Maine Values LLC represents the first time in 14 years that the newspapers have been Maine-owned.

The Seattle Times Co. bought the business from Guy Gannett Publishing Co. in 1998, taking on heavy debt to finance the acquisition. As the economy and ad revenue slowed, the owners began rounds of spending cuts and layoffs to meet payments. They announced plans to sell the Maine properties in March 2008.

The company was purchased in 2009 by an investment group led by Richard L. Connor, with Texas-based HM Capital Partners holding the largest share. Mounting financial problems last year left the company insolvent and negotiating with creditors, and prompted further cuts to the work force. Connor left the enterprise late last year, following undisclosed conflicts with the board, and HM Capital then put the business up for sale.

When a proposed purchase agreement by another potential investor fell apart, Sussman stepped forward following contact by members of The Portland Newspaper Guild.

Initially, Sussman had planned to lend MTM $3.3 million, acquire a 5 percent equity stake in the company and gain a seat on the board of directors. The financial structure changed, however, during final negotiations.

Institutional investors, including out-of-state pension funds, asked for important changes to the original package announced in February. Sussman’s financial contribution still adds up to the same amount of money, $3.3 million. But instead of a loan, the money is being used for a straight purchase of private stock. The result is that Maine Values will have a 75 percent ownership stake in the company, rather than 5 percent.

The change was requested by the institutional investors, according to MaineToday Media Board of Directors Chairman Peter Brodsky. They believed the additional debt could have hampered the company’s growth strategy, he said.

“It’s a good day for our company, our 412 employees and the 3,000 Maine vendors we work with in communities across the state,” Brodsky said in a statement. “As with any deal, we had to listen to our institutional investors and be responsive to their feedback.”

Sussman’s limited role in the company’s operations remains unchanged with the straight stock purchase. He said that while he would have preferred the original arrangement of the loan and a smaller equity stake, he was not willing to abandon an important community resource and the hundreds of jobs that came with it.

“I’m just happy that the MTM newspaper business is secure and now has a chance to grow,” he said.

 

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