The Press: The Press, Dec. 12, 1955

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On to Birmingham

For the biggest price ever paid for a newspaper—$18,642,000—Publisher S. I. (for Samuel Irving) Newhouse last week bought the Birmingham News, one of the South's leading dailies. The sum brought to $33 million the amount spent in the last five years alone for newspapers by the small (5 ft. 3 in.), publicity-shy New Yorker. Like his last two buys, the Portland Oregonian and the St. Louis Globe-Democrat (TIME, April 4), the purchase of the News put Newhouse into a new region of the U.S. It also put him right behind the Hearst and Scripps-Howard chains, with an empire of 13 newspapers (total circ. 3,576,320) worth an estimated $70 million. The News was sold by its five trustees, heirs of the late Publisher Victor Henry Hanson, who, over 36 years, built the News (daily circ. 180,215, Sunday circ. 219,804) into one of the most prosperous U.S. dailies. The deal was started more than a year ago by Newspaper Broker Allen Kander (whose commission was around $500,000) and signed one afternoon in a Birmingham hotel room. Though self-made Publisher Newhouse prides himself on using his own money to buy news papers, he admitted reluctantly that the whopping price had sent him to Manhattan's Chemical Corn Exchange Bank for a loan of "about $10 million."

Risky. With the News he also got its subsidiaries: the Huntsville. Ala. Times (circ. 18,988), radio stations WAPI, WAFM and WHBS, TV station WABT and a freight company. Last year the News and subsidiaries piled up $3,000,000 in profits before taxes. A big reason for the fat profit is the fact that the News holds a virtual monopoly in Birmingham. By 1950 it had grown so strong that it forced the Scripps-Howard Birmingham Post, now the Post-Herald, into a junior partnership. Though separately written, the Post-Herald is printed and distributed by the News.

Why did the paper's five trustees decide to sell? First, said Publisher Clarence Bloodworth Hanson, 47, nephew of the late publisher, because the tightly knit team of trustees had been weakened only the week before by the retirement of James E. ("Chap") Chappell, 70, as president and editor. "That made us think of when others might have to step out," explained Hanson. Moreover, he said, the offer came to $8,804.70 for each share of News stock—an immense temptation when weighed against "so ephemeral and risky a business as the newspaper business can be."

What really clinched the decision was Newhouse's offer to keep the paper's top executives at their posts. Newhouse gave Publisher Hanson and General Manager Harry B. Bradley, 60, generous contracts to stay put until they are 65. He even gave a contract to Hanson's son Victor, 25, currently serving in the Air Force, assuring him the chance to enter the business and work toward a top managerial job.