Citizen up for sale by Gannett

The Citizen's masthead, its Web site and Web address, some editorial equipment, its subscriber list, vendor and contractor contacts and wire services have been put up for sale, said Tara Connell, a Gannett spokeswoman.

The Citizen, an afternoon paper that publishes Monday through Saturday, operates under a joint operating agreement with the Arizona Daily Star, which is owned by Iowa-based Lee Enterprises Inc.

Lee and Gannett equally own Tucson Newspapers, but both maintain separate newsrooms and have independent editorial operations.

Gannett's stake in the joint operating agreement, or JOA, is not immediately for sale, Connell said. That includes production, distribution, sales and other non-editorial functions for both papers, which are carried out by a third company called Tucson Newspapers Inc.

Asked whether Gannett would sell or retain its interest in the JOA, she said: "There are discussions going on, but right now let's get it sold, and then we can talk about what happens next."

Bob Dickey, president of the U.S. Community Publishing division of Gannett, came to Tucson Friday to tell Citizen staffers. In a written statement, Dickey said: "Dramatic changes in our industry combined with the difficult economy — particularly in this region — mean it is no longer viable for our partnership with Lee Enterprises Inc. to produce two daily newspapers in Tucson."

The Citizen, one of Arizona's oldest newspapers, has been publishing since 1870.

Tough time to sell

The Citizen's interim editor, Jennifer Boice, said Dickey notified staffers about 3:45 p.m. Roughly half of the Citizen's 65 employees were in the newsroom at the time of the announcement, she said.

"People were surprised and stunned," Boice said. "This isn't something we were necessarily expecting."

Gannett has had several rounds of layoffs recently at most of its newspapers, including one in December when it cut the work force of its community publishing division by 10 percent.

Dickey told Citizen staffers the newspaper on its own is losing money, and ad revenue and circulation don't justify the cost of production, publication and distribution, Boice said.

Citizen employees could be hired by a new owner if one is found, Connell said. If not, they will receive severance pay or be eligible for rehire at other Gannett papers if positions are available, she said.

Boice did not seem optimistic about a sale.

"There are a number of papers for sale across the country right now, and so far there aren't many takers," she said. "And there certainly haven't been many takers when the newspaper is the secondary one in the market."

The Citizen's average daily circulation is about 17,000 newspapers, compared to the Star's 117,000.

Tucson Newspapers President Mike Jameson sent a letter to his employees Friday informing them of the situation.

"The announcement of the sale or closure of the Citizen is hard news for us and will likely be a shock to the community," he wrote. "But mostly, this is a very trying time for all our friends and colleagues at the Citizen."

Latest newspaper for sale

The joint operating agreement runs through 2015, and Jameson said what happens next with it depends on whether there's a buyer, and what offer the buyer makes.

Gannett, Lee Enterprises and the Justice Department — which regulates JOAs — each would have to approve, Jameson said. Through the JOA, Gannett received about $13 million in 2007, Jameson said. He added that the profit split will be much less for 2008, but he did not specify the amount.

With the announcement, Tucson becomes the latest city on the verge of losing its second daily newspaper as the industry suffers from the poor economy, falling retail advertising and circulation declines.

Denver's Rocky Mountain News, owned by E.W. Scripps Co., was recently put up for sale and could close if a buyer isn't found soon. Hearst Corp. put Seattle's oldest newspaper, the Seattle Post-Intelligencer, up for sale last week and said it would likely close or exist only online if a buyer isn't found by March.

"Any community is better served — is wonderfully served — by having two differing voices that can tell different stories and report on the news that matters," Boice said. "If the Citizen goes away, I think it would be a great loss of information."

Gannett, based in McLean, Va., publishes 85 daily newspapers in the United States, including The Arizona Republic and USA Today, and operates 23 television stations, including KPNX in Phoenix.

Earlier this week, Gannett announced that nearly all employees at all its publications and broadcast outlets would be furloughed for one week without pay during the first quarter of 2009 to avoid layoffs.