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Tuesday, June 5, 2012

When buying a newspaper, beware the Trojan Christmas tree

In our search for a weekly newspaper to buy, December 2005 was a busy month for us.
Right around Christmas, Luke, Robert, Nicola and I visited Middlebury, Vermont, to look at a weekly paper there. It had serious competition from a daily and another, more-serious weekly. The longtime owner ran a less-serious paper with fewer real news stories, more submitted items and pretty poor design.
Still, she claimed to have incredible annual revenue — and a pretty high asking price.
Of course, we never could verify the revenue figures, because she kept all of her books in an old-fashioned ledger book, the kind you’d find Bob Cratchit working on.
I have to admit, when we arrived in Middlebury on a beautiful winter weekend, we were smitten. It’s the kind of place we were looking for, a picturesque, quaint, old-fashioned, wealthy college town.
I think the paper’s owner was counting on that kind of emotion to make the sale. Shortly after we arrived in our hotel room, she arrived at our door with a gift, a miniature decorated Christmas tree. She just stopped off to say hello and bring us the Christmas tree. She’d let us get settled in our room, then we could get back together later to meet and have dinner.
I don’t remember if it was me or Nicola who first had the thought, but at some point we decided to examine the Christmas tree more thoroughly, looking for a bugging device, thinking that this woman had planted the tree as a way to gain an unfair negotiating position.
We couldn't find anything, of course, but just to be safe, we eventually put the tree in the bathroom with the door closed.
What our experience in Middlebury taught us was that we were going to need an accountant to really scrutinize numbers very closely. The other major thing we realized was that it was very likely that we would be unable to afford to buy a house in Middlebury. Even if we could buy a house in Middlebury, we probably wouldn’t be able to afford the taxes. That would leave us living somewhere outside Middlebury, living a life that wasn’t very attractive to us. Plus, the growth potential for the newspaper was virtually nil. I could have improved the paper journalistically, but there were already two very good journalistic newspapers in town. No, people liked this newspaper because of its owner and, in a way, because it wasn’t a “real” newspaper with “real” news stories in it. And, frankly, I did not want to run that kind of newspaper.
And so we kept looking.

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