----------------------------------------------------------------------------------------------

Mergers & Acquisitions

New England Newspapers Buys Free Vermont Weekly

New England Newspapers Inc., part of the Denver-based MediaNewsGroup, has inked a deal to buy the Original Vermont Observer. The purchase includes the newspaper's subsidiary publications and Web sites.

David Emmons of W.B. Grimes & Company, represented the Observer in the transaction.

The Observer, a free weekly, is based in Jamaica and covers southern Vermont and southwestern New Hampshire. It is distributed on Wednesdays and has a circulation of 12,259, of which 9,423 copies are subscriptions.

New England Newspapers owns several New England newspapers, including the Brattlesboro Reformer.

Martin C. Langeveld, vice president of New England Newspapers and publisher of the North Adams (Mass.) Transcript, said that the change of ownership, expected to take effect June 30, would not alter the Observer's distribution.

-----------------------------------------------------------------------------------------------------------------------------

Industry News

FCC To Take Up Cross-Ownership Issue Again
By Radio Business Report
July 1, 2005

FCC Commissioner Kathleen Abernathy told reporters yesterday that the Third Circuit order remanding the far-reaching 6/2/03 media ownership rulemaking will be dealt with at the Commission's next regularly-scheduled Open Meeting, due to be held 7/14/05 at 9:30AM. It will be a simple, non-controversial laying-on-the-table of the issues brought up by the Third Circuit.

The Third Circuit did not tell the FCC what result to arrive at - - it said to either change a given rule or better-justify the 6/2/03 version - - so in each case, the FCC will ask for commentary and, more to the point, evidence as to which course to take. The entire Third Circuit mandate will be dealt with in one agenda item, with a decision on breaking it into smaller pieces reserved for later. A decision on whether another round of public hearings will be held is also reserved.

-----------------------------------------------------------------------------------------------------------------------------

One Fifth of Web Users Read Their Newspaper There
By Center For Media Research
Friday, July 1, 2005

Nielsen//NetRatings, focusing exclusively on Internet users who consume newspapers and excluded online users who obtain their news from other online news and information sources, reports that a significant 21 percent of Web users who read newspapers, have transferred their readership primarily to the online version.
(For Entire Article Click Here)

-----------------------------------------------------------------------------------------------------------------------------

Stop the Presses?
Not So Fast....Even amid high costs and fierce competition from online media, newspaper companies have more potential than they get credit for…
By Scott Kessler,
Director, Information Technology Equity
Research Standard & Poors
BusinessWeek.com

Are newspapers going the way of the dinosaurs? Advertising growth has been anemic (we at Standard & Poor's expect it to lag real gross domestic product in 2005). Subscriptions have been declining. Competition from other media, particularly the Internet, is substantial and growing. Input costs for paper and ink are quite high -- and rising. Employee-related expenses are also climbing.

In fact, over just the past week or so, Standard & Poor's Equity Research cut earnings estimates for three of the country's largest newspaper companies: Gannett, Knight-Ridder, and New York Times Co.

In contrast, online advertising revenues rose 26% in the first quarter, according to the Interactive Advertising Bureau and PricewaterhouseCoopers. Segment bellwethers Google and Yahoo! each outpaced this strong growth. Moreover, Web businesses are largely unaffected by commodity prices and don't have legacy pension obligations. But there’s more….

(For Entire Article Click Here)