Bad News

Page 4 of 6

After buying the News, Ralph Martin installed his younger brother Michael as the general manager, despite the latter's lack of newspaper experience. The elder brother had his eye on a nearby Deerfield Beach-based chain of papers, but when the Sun-Sentinel snatched it up in 1997, he and his company lost interest in the News. CNHI had owned the News for only a year when it worked out a deal to sell the paper to Michael Martin for $6.5 million. The company kept the old News building in downtown Boca Raton, which it has been trying to sell ever since, and Michael Martin took everything else.

According to an ex-News employee who worked for the paper at the time and asked not to be named, Michael Martin had neither the money nor a likely investor. "He didn't have two pennies of his own money, as far as I know," says the employee. Luckily Ron Smith, then the News's editor in chief, had a connection: Chattanooga Times publisher Paul Neely. (Smith declined to comment for this story.) On April 22, 1999, Michael Martin, with Neely's backing, became the News's third owner in three years. And before he sold the paper to Neal Heller last July 20, he almost ran it into the ground.

On the day Michael Martin took over, Smith wrote a front-page story about the new boss that contained an interesting, if elliptical, paragraph: "The 42-year-old businessman said unique circumstances allow him to go against the national trend toward chain ownership of smaller daily newspapers." Unique indeed. In fact the circumstances were almost unheard of.

Martin had gotten into a few legal scrapes. In 1993 the federal government garnished his wages for defaulting on a student loan. Three years later, while living in Arizona, Martin, who is gay, was involved in a fight that ended with his boyfriend, Barry Brooks, in the hospital.

According to police reports, Martin had been staying at Brooks's Scottsdale home regularly for two months. On January 11, 1996, the pair had several drinks before starting a shouting match. Martin packed a small bag and left. But before Martin could drive away in his Honda Passport, Brooks demanded the return of a garage-door opener. Martin backed out of the driveway while his host was reaching into the car, dragging Brooks about 20 feet into the street. Brooks suffered a broken right patella, a broken left ankle, and severe scrapes on his legs.

Brooks sued Martin in civil court. In 1997 a jury awarded Brooks $9000 but found the relative degree of fault split evenly between the two.

About that time Martin moved to Florida, where he worked as vice president of sales and marketing for Whitman Education in Miami before brother Ralph made him general manager of the News.

Neely chooses his words carefully when talking about the News. "I'm not going to talk numbers," he says when asked to confirm the reported sales price of $6.5 million. In a roundabout way, he concedes that he was the sole financial backer. "I brought something to the partnership, and they brought sweat equity."

Two other sources -- Chris Mathieson, who was Martin's live-in boyfriend until the two split this summer, and an ex-News employee who worked in the business department and asked not to be named -- fill in the details. Martin had 57 percent of the company, and Neely held 30 percent. Martin gave the remaining 13 percent to Clifford Jones, chairman of the Boca Pops Orchestra and a close friend. (Jones did not return phone calls for this story.)

Neely financed the deal by using personal stock as collateral for a loan, says Mathieson. Better still for Martin, Neely lived outside Florida and rarely visited. "How does someone invest millions and have no oversight?" asks the former business-department employee. "What is going on?"

Together Jones, Martin, Neely, and Ron Smith composed BRN Media Group, which owned the News and two smaller publications, Education Times and B Magazine.

Times were good in the stock market back then, and as Neely's portfolio increased in value, he took additional loans to finance the paper's operation, say Mathieson and two sources who asked not to be named. Neely's total investment peaked at $11 million before he pulled the plug, according to the three.

When BRN bought the News, Martin threw a catered, red-carpet bash complete with a band, valet parking, and gift bottles of wine labeled "BRN Media." All the beautiful people of Boca were invited, says the ex-employee. But the staff was snubbed, then and later. "Come Christmas we didn't get a lousy, stinking Christmas card from him or a thank you. We got nothing."

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Bob Whitby