A Wellesley entrepreneur’s effort to buy a controlling interest in Maine’s largest newspaper company has collapsed after contentious negotiations with its unions and management.
Aaron Kushner, who leads a group of investors called the 2100 Trust, was unable to build consensus around his plans to overhaul operations and union contracts at MaineToday Media Inc., which owns The Portland Press Herald and several other newspapers. Kushner had previously tried to assemble a bid for The Boston Globe.
On Friday, MaineToday Media announced that it had ended talks with Kushner in favor of a loan from a Maine philanthropist to help pay down debt and fund its growth plans. The philanthropist, S. Donald Sussman of North Haven, is providing a loan valued at $3 million to $4 million.
MaineToday Media also owns the Maine Sunday Telegram, the Kennebec Journal, the Morning Sentinel in Waterville, and the Coastal Journal in Bath. Like many newspaper companies, it is struggling with declining advertising revenue and circulation, and has been forced to cut jobs and wages in recent years.
The money from Sussman, who founded a Connecticut hedge fund called Paloma Partners, will provide the company with a short-term cash infusion to help it pay off creditors and invest in planned improvements to its digital products.
Sussman, who is married to US Representative Chellie Pingree of Maine, will own a 5 percent equity stake in MaineToday Media and have a seat on its board of directors.
Tom Bell, president of the Portland Newspaper Guild, said Kushner quickly presented the union with a list of 50 changes to its contract, including a longer work week and increases in employee health care contributions. He said the changes would have further cut employees pay after they agreed to a 10 percent wage cut 2 1/2 years ago.
“Toward the end of our negotiations, [Kushner] backed off most of the changes,’’ Bell said. “But because he started off with such a draconian proposal, it was hard for the relationship to recover.’’
Kushner said the deal broke down over philosophical differences over improving the company’s financial performance. He said his ultimate goal was to significantly increase the company’s staff of journalists, but that the contract changes he proposed were needed to lay the groundwork for its growth.
“At the end, they were able to find a philanthropist to address their immediate cash needs, and they decided to go that route,’’ Kushner said. “It’s a really important newspaper company, and we hope they’re successful.’’
Kushner, who has run a greeting card business and an Internet start-up, said he is considering investments in other New England newspaper companies, but he declined to name them.
Casey Ross can be reached at email@example.com.