Dow Jones & Co., the publisher of The Wall Street Journal, said yesterday it is seeking a buyer for its Ottaway group of community newspapers, which includes the Cape Cod Times, the Standard-Times of New Bedford, the Inquirer and Mirror on Nantucket, and the Portsmouth Herald in New Hampshire.
The sale had been expected ever since Rupert Murdoch, chairman and chief executive of News Corp., said in August he would be "selling the local newspapers fairly quickly" once he completes his $5 billion purchase of Dow Jones. That deal is likely to close in December. A shareholder meeting is set for Dec. 13.
Dow Jones has retained Dirks, Van Essen & Murray, a newspaper broker based in Santa Fe, to handle the potential sale.
"The options under consideration include the possible sale of some or all of those papers and associated media properties," Dow Jones said.
Lou Ureneck, chairman of the journalism department at Boston University's School of Communications, said the timing is good for potential buyers. "It's a great time to buy a newspaper," said Ureneck. "If you believe in the future of newspapers, the prices are rock bottom."
Ureneck said the local papers, though profitable, don't fit into Murdoch's plan of assembling an international business news operation that would include his newly launched Fox Business Network.
The Ottaway papers contributed $179 million in revenue to Dow Jones this year through Sept. 30, or more than 10 percent of the publisher's total revenue.
A likely bidder, observers said, is GateHouse Media Inc., the news company based in Fairport, N.Y., that purchased a huge collection of suburban papers surrounding Boston in two separate deals for $410 million last year.
"It all comes down to price," said Ken Doctor, a media analyst at Outsell Inc., a research company for the information industry. "The Ottaway papers are worth less than they would have been a year ago."
Doctor estimated the entire Ottaway chain might fetch 10 times the free cash flow it generates, or somewhere between $500 million and $600 million. A year ago, it might have fetched 12 times cash flow, he estimated.
"I hope they can find a good newspaper publishing company that understands the business, and that they don't sell it to a purely financial owner," said James Ottaway, chairman of the newspaper chain for 27 years ending in 2003 and a director of Dow Jones until 2006.
Jeffrey Krasner can be reached at krasner@globe.com.
