Florida Newspaper Battle Pits Cox vs. The Davidson Family

By: E&P Staff A shareholder scuffle has erupted in a Florida federal court over the family-owned Daytona Beach (Fla.) News-Journal and its minority owner, Cox Enterprises. The two sides are at odds over the perceived value of the paper.

The Davidson family, which has controlled the News-Journal since 1928, wants to purchase Cox's 47.5% stake in the company. The Davidsons hold 52.5%. The News-Journal offered Cox $29.4 million, but Cox is seeking $145 million.

U.S. District Judge John Antoon II is hearing the case, which started on Wednesday. According to the News-Journal, the trial has no jury.

This is not the first time the parties have appeared in court. Cox Enterprises sued the News-Journal in 2004 when the paper paid $13 million for the naming rights of a performing arts center in Daytona. Cox alleged that the News-Journal overspent on the naming rights, claiming it was the "pet project" of Davidson family members. In response, the News-Journal said it would buy out Cox's interest.

In this most recent suit, Cox is seeking an additional $10.9 million on top of the $145 million for "corporate injury" due to the naming rights, according to an article in the News-Journal.

News-Journal staff writer Jay Stapleton reported that during Thursday's court session, Cox accused the paper of earning less money while spending 10 times the amount on marketing and promotions than other newspapers of its size.
News-Journal countered by saying it "can't be compared to other papers and their profit margins because it's an independent newspaper in a competitive market," Stapleton wrote.

Cox brought in Owen Van Essen, of newspaper broker firm Dirks, Van Essen & Murray, as an expert to testify on their behalf. According to Stapleton's account, Van Essen said the expenses at the paper were considered ?'abnormal'? due to high spending on promotional activities, costs could be trimmed, and that the paper was worth $306 million ?because it's a hot property in a hot market.?

News-Journal attorney, Bruce A. Hanna, fired back: ?'If the News-Journal stopped its promotional expenditures, shut down its cafeteria, burned its service station for its trucks down to the ground, closed down the sheet fed printing room, how many News-Journal employees would have to be fired to suit you?'?

Van Essen said that the News-Journal's profit margins were below those papers operated under public companies. Though he later conceded in court that the News-Journal's ad revenue grew about 13% and its circulation increased about 8%.

The trial is expected to end on Dec. 19.

Cox has been a minority shareholder in the News-Journal since 1969. At one point, Cox had approached the Davidsons with an offer to buy the newspaper but the family rebuffed the advances.