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NY Times sells TV stations

Company to concentrate on newspaper business

New York Times Co. agreed to sell its nine U.S. television stations to Oak Hill Capital Partners LP for $575 million to pay down debt and expand its investments in Internet businesses.

The broadcast group includes two stations in Oklahoma and others in Pennsylvania, Iowa and Arkansas, the New York-based company said today in statement.

Chairman Arthur Sulzberger is under pressure from shareholders to accelerate revenue growth as readers shift to the Internet and away from publications such as the New York Times and the Boston Globe. The company will use the cash to lower debt and consider acquiring or investing in Internet businesses, spokeswoman Abbe Serphos said in an interview.

“I think they got a pretty fair price, so that’s positive,” said Thyra Zerhusen, Chicago-based manager of the $635 million ABN Amro Mid Cap Fund, which owns 1.04 million New York Times shares. “Internet businesses are good because the margins are high but I don’t want to see them make any kind of big acquisition.”

The company should use the proceeds for debt repayment and to buy back shares, Zerhusen said in an interview. Shares of New York Times Co., the third-largest U.S. newspaper publisher, fell 39 cents at 4:24 p.m. in New York Stock Exchange composite trading. They declined 7.9 percent in 2006.

Other Stations

Oak Hill Capital, a Menlo Park, California-based private equity firm, has shown interest in media properties including Clear Channel Communications Inc., the largest U.S. radio broadcaster, which sold itself to a group led by Thomas H. Lee Partners LP and Bain Capital Partners LLC for about $19 billion in November.

Texas oil billionaire Robert Bass founded Oak Hill two decades ago to invest his wealth. The firm manages $4.6 billion of private equity, according to its Web site. Media investments include Wometco Cable Corp., a cable-television operator with more than 300,000 subscribers in the U.S. Southwest, and WideOpenWest LLC, which provides cable, phone and Internet services in cities including Chicago and Detroit.

Shareholders have criticized Sulzberger and Chief Executive Officer Janet Robinson for overpaying in the $410 million purchase of the About.com Web site in March 2005 and for constructing a new tower for its headquarters in Manhattan. The company said in October that it will lease out five of the 28 floors it intended to occupy.

The New York Times stations, which accounted for about 4 percent of 2005 revenue, were put up for sale in September. They include operations in Tennessee, Illinois, Alabama and Virginia. Operating profit at the broadcast unit in 2006 will be about $33 million, the company said in September. New York Times acquired the Memphis station, it oldest, in 1971.

Goldman, Sachs & Co. served as financial adviser to New York Times. Morgan, Lewis & Bockius LLP and Covington & Burling LLP were the company’s legal advisers. Oak Hill used UBS Investment Bank for financial advice and Dow Lohnes PLLC for legal services.