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ORLANDO, Fla. (AFX) - The owners of The Daytona Beach News-Journal must pay $129.2 million to buy out their corporate partner, Cox Enterprises Inc., far more than the owners said the minority stake was worth, a federal judge ruled.
Cox Enterprises Inc., which owns nearly half of The Daytona Beach News-Journal, had sued the newspaper's directors, accusing them of wasting $13 million for naming rights to a community arts center in Daytona Beach.
The 2004 lawsuit by Atlanta-based Cox sought to stop the transaction or have Cox's ownership share of the family-controlled newspaper bought out.
The News-Journal Corp. had argued it should pay $29.4 million for the Cox share, based on what the company would be worth if it continued operating as it has in the past. Cox had argued that its 47.5 percent share was worth $145 million.
In his ruling Friday setting the value at $129.2 million, U.S. District Judge John Antoon II called the News-Journal "a marketable corporation" and said past management practices were "replete with evidence of corporate waste."
The purchase of the naming rights to the arts center "made little sense from a business perspective," the judge wrote.
"I feel vindicated," Jay Smith, president of Cox Newspapers, said.
The newspaper had argued the naming rights deal brought the paper promotional benefits, and called the dispute an illustration of the different perspectives between family and corporate ownership.
Previously, Smith had said it was possible that Cox could end up buying out the News-Journal's shares in the company, but he declined to discuss that possibility Friday. "The ball remains very much in their court," he said.
Georgia Kaney, publisher of the Daytona Beach newspaper, declined to comment on the verdict. Both sides have 20 days to submit a method of payment to the judge, who will rule on financial terms after that. Copyright 2006 Associated Press. All rights reserved. This material may not be
Copyright 2006 AFX News Limited. All Rights Reserved.
