The Post Co. of Idaho Falls is considering joining Newsies LLC, a company formed by Ketchum Realtor and developer John Sofro, to buy the Wood River Journal newspaper in Hailey.
Negotiations with The Post Co. are the subject of a letter from Sofro to the Post's majority owner, retired publisher Jerry Brady.
The letter, dated March 26, was e-mailed to more than 300 recipients.
"I understand your concerns regarding the risks involved in purchasing the paper, we share them as well," Sofro wrote. "Our obvious hope is that together we can mitigate the risks and get the paper turned around."
A separate executive summary distributed to prospective investors outlines the purchase terms and conditions. It states that the Wood River Journal purchase price is $150,000. The prospectus lists Sofro as the contact. The letter, however, refers to negotiations with current owner Lee Enterprises to seek a reduced purchase price of $50,000.
"Management is planning to raise an additional $600,000 in operating reserves," the executive summary states. "The total equity capital raise of $750,000 will be in exchange for 90 percent ownership in the paper. Management will retain 10 percent ownership in the paper."
The prospectus says the Wood River Journal had an operating cash flow of minus $290,000 in 2007 and minus $463,000 in 2005.
Asked how his company's involvement can help turn the paper around, Brady said, "I don't think I will go into that."
"We certainly have been in discussions," Brady said. "I've been in the valley. I've spoken with the staff of the Journal. We don't have final agreement yet. We've been in discussions with Lee.
"We're interested in good journalism. We're interested in small papers. We're interested in the issues that affect the people of central Idaho. We've been interested for a long time, even though we're located in Idaho Falls."
The Post Co. owns the daily Post Register newspaper in Idaho Falls. The newspaper is partly owned by employees. The Wood River Journal is owned by Lee Enterprises, a publicly traded company based in Davenport, Iowa.
Brady, a Democrat, has twice lost bids for the Idaho governor's seat. He lost to C.L. "Butch" Otter in 2006 and to Dirk Kempthorne in 2002.
According to state records, the Post's board of directors as of July 2007 included Brady, Post Register editor and publisher Roger Plothow, Mary Orchin Brady, Joseph Call, all of Idaho Falls; A.L. Alford of Lewiston; and John M. Brady of Layton, Utah.
Sofro declined Tuesday to comment, but his letter referred to ongoing negotiations between Newsies and The Post Co.
"However I feel that the financial terms which have been suggested unreasonably place all of the risk and liability on Newsies," he wrote.
Sofro proposed a split ownership of 51 percent for The Post Co. and 30 percent for Newsies.
"I suggest that the 19 percent which was to be held in the treasury for future sale be sold to qualified investors as soon as possible to satisfy the working capital provision of your outline," Sofro wrote.
The letter also indicates that Newsies has asked Lee Enterprises to push the closing date back to May 7.
Brady, who shares Sun Valley Co.'s birth year of 1936, said he began visiting the Sun Valley area immediately after World War II.
"I've skied there a long time," he said. "It's not just another place to be involved in journalism. It's a place I care about, and it's fascinating, the issues of the valley.
"I expect it will happen, but I've told you that's as far as I think I'm willing to go."
