The Paddock family is selling its ownership stake to Paddock Publications’ Employee Stock Ownership Plan, converting to full employee ownership 120 years after Hosea C. Paddock bought a newspaper that was the seed of a publishing company in the Chicago suburb of Arlington Heights that includes the flagship Daily Herald, Spanish-language and business weeklies and community papers in downstate Illinois.
Ownership is expected to become fully employee owned before the end of the year. Paddock Publications has been partially employee-owned since the ESOP was established in 1976.
Chairman, Publisher and CEO Doug Ray said in a report on the conversion that the ESOP would provide significant tax benefits while giving employees a bigger financial stake in the company.
“We all know the dynamics of a changing newspaper landscape, one newspaper sale after another, in some cases to investment firms, and in others to large public companies,” Ray told employees. “All the while the Paddock board of directors has fostered independent newspapering and has supported a culture of community service best served by local control. This ESOP transaction is designed to continue our family-oriented legacy and importantly to build upon a successful and sustainable business model driven by employee owners.”
Two fourth generation family members at the company, Robert Y. Paddock Jr., executive vice president and vice chairman, and his cousin, Stuart R. Paddock III, senior vice president of information technologies, said they will continue to work for Paddock Publications after the conversion.
“Neither my cousin Stu nor I have family members working in the paper,” Robert Y. Paddock Jr. noted in a statement. “In these days of industry change and consolidation, we think employee ownership can in effect become the fifth generation of Paddock Publications. We think we and management will work to continue the good business and journalistic role we have in our communities, with us being two among many employee stockholders.”
Stuart Paddock said he and his cousin believe it is most important to preserve “the culture of family ownership, the thriving standard of excellence we reach for every day and our integrity is preserved through future generations. There is no better owner we can think of to accomplish this than the very employees responsible for our historic success.”
A plaque outside the editorial department, a Daily Herald editorial noted, reads in part: “Across four generations, the Paddock family has been steadfast in its devotion to the newspaper and a source of inspiration for journalism excellence in our newsrooms.”