The Pentagon

It is with trepidation — and a stubbornly persistent sense of hope — that we report that a group of California venture capitalists have bought my alma mater, Defense News, as well as Army, Navy, Air Force and Marine Corps Times and Federal Times. They also laid off several top people there.

Vago Muradian, host of Defense News TV and my successor as editor at the paper, has been laid off, according to my sources. He was not alone. Defense News’ Managing Editor Dave Gustafson, longtime Deputy Editor Greg Couteau and business reporter Andrew Clevenger were let go. The CEO of Sightline Media Group, Mark Flinn, and the VP for Defense News, Kate Tapplett, were let go, along with most of the information technology support people and the secretaries. Right now, it looks as if about 15 people are being let go.

Four sources have provided details of the deal and I received a copy of an announcement prepared for release, but I haven’t seen an official statement yet.

What does this mean? it’s awfully hard to tell this early. The buyer, Regent Equity Group, has a fabulously thin online presence. Here’s the only information on their website, aside from two locations:

“Regent Equity Partners (“Regent”) is a multi-sector private equity firm focused on event driven transactions where capital solutions are required on a certain and often accelerated basis.

“Our operating strategy is to partner with management teams to build leading companies that generate sustainably high returns on invested capital over an indefinite time horizon.”

Among the company’s top people are William Koneval, Dionisio Lucchesi and Michael Reinstein. They bought HistoryNet about a year ago. Regent, according to the LinkedIn profiles of Lucchesi and an associate, focuses on “buying and building businesses in the lower middle market, Regent seeks to acquire businesses that are typically facing strategic, operational, financial or organization challenges but have the ability to be improved and advanced forward with a new investment partner.”

What will this mean for coverage of the Pentagon and its associated industries? That is incredibly hard to tell this early. Regent already owns HistoryNet, which it bought about a year ago. That site includes the title Military History, so you can argue there’s a bit of cross-site editorial understanding possible. But two broad types of entities — publicly held companies and venture capitalists — have been notably uneven in their success with building and growing editorial content providers such as Defense News. They often don’t understand how easily and badly they can damage the most valuable assets on their books — seasoned and successful editors and reporters — by treating them as cash flow issues. And they rarely understand much about the markets into which they are entering. This is especially true of companies that have bought aerospace and defense publications (one example — Lou Dobbs and Space News). If my colleagues and Regent are lucky, the venture capitalists will listen to the editors and long-serving ad salespeople about what lies ahead.

We love competition and treasure the vigorous debate that good publications generate so we wish all my colleagues and their new bosses well.