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Most people might not consider being hospitalized with an unexpected heart condition a stroke of good luck, but Frank Shepherd, former owner of 21st Century Newspapers and The Oakland Press, said a three-day stint at a cardiac unit near the end of 2003 was just that.
At 62 years of age, Shepherd had amassed one of the largest newspaper companies in the country, buying 129 newspapers in five years, starting with The Oakland Press, which had a daily circulation of about 90,000 and was making nearly $20 million a year in profits. He had successfully battled The Detroit News and Detroit Free Press for advertising dominance in Oakland and Macomb counties, but Shepherd, like few in the newspaper business, could foresee the impending recession and how it would decimate ad revenues. Nor were they aware how the online and digital revolution would eat into their subscriptions and swallow their classified sections. But in October of 2003, while being treated for a heart issue at William Beaumont Hospital in Royal Oak, Shepherd read a book his wife had bought him from the gift shop that put the writing on the wall.
"It was written by a woman who was an auto writer for The Ann Arbor News. I still have the book and underlined parts. Basically, her thesis was that the auto industry was going away, and the Japanese were taking it over, and it would go to Mexico and the South, and business would go in the shitter," he said. "I said, 'I think she's right.'"
Faced with health concerns and convinced his business would be facing a major downturn, Shepherd decided to sell his publications and retire. That November, he went to New York City to tell his creditors he wanted to put the company up for sale. In the spring, 21st Century Newspapers was on the auction block and sold to the Journal Register Company for $415 million.
"At the end of the day, I wasn't that good – I was lucky," Shepherd said of his decision to get out of the business. "The timing of my heart problem was lucky. I was only 62 and wasn't ready to retire. I was looking to expand. The health problem and the book triggered it. I got lucky.
"When we closed the deal in 2004, and they closed the books in September, it was the first time that 21st Century Newspapers and The Oakland Press missed their revenue estimates. I don't think they ever recovered."
About four years after the sale of the business – which included The Oakland Press, The Macomb Daily, The Royal Oak Daily Tribune, The Morning Sun in Mount Pleasant, and more than 100 other newspapers across Michigan – the Journal Register Company declared bankruptcy for the first time. In 2012, the owners of The Oakland Press filed for bankruptcy a second time, eventually merging with Denver-based MediaNews Group, owner of The Detroit News. Today, the company is operated by Digital First Media, which became the business name of MediaNews Group, which had also filed for bankruptcy protection in the past....continued on page 2