LIFE GOES ON FOR THE NEWS-JOURNAL CENTER

LIFE GOES ON FOR THE NEWS-JOURNAL
CENTER
Author: Pam Sherborne
Date: July 26, 2006

The $23 million building in Daytona Beach, Fla.
opened last January and business has been “awesome,” according to
Julie Rand, executive director. She spoke about the two major
tenants of the building and the variety of other events, especially
community events, the building has hosted.

But, what she wouldn?t speak about is the
continuous feud between the Daytona Beach News-Journal?s Davidson
family and Cox Enterprises, majority shareholder versus minority
shareholder, respectively. It was the $13 million, 26-year naming
rights deal the Daytona Beach News-Journal inked two years ago that
sparked the many days, months, and years of legal hours and
expenses.

“I can?t comment on that,” Rand said. “It is not
affecting the center. The community has really embraced the
facility.”

The Daytona Beach News-Journal?s majority
shareholder is the Davidson family, owning 52.5 percent. The
Davidson family bought into the paper in 1928 and, since, has been
involved in the day-to-day operations. Cox Enterprises,
headquartered in Atlanta, has had a 47.5 percent stake in the
newspaper. That company bought into the News-Journal in 1969.

The federal lawsuit was filed in U.S. District
Court by Cox Enterprises in May, 2004. Cox alleged, among other
concerns, the family-controlled board of the newspaper misused
corporate funds to further personal interests. Cox stated it had
never been consulted on the naming agreement. Cox alleged the
newspaper overpaid for the naming agreement on a project that might
have failed without the newspaper?s $13 million. It has been
reported the $13 million was a cash upfront deal.

The newspaper, in turn, countered that Cox
didn?t care about the newspaper?s support of the local arts
community. The lawsuit, in turn, triggered an option the
News-Journal held to buy out Cox?s share. The newspaper exercised
that option.

A two-week trial was held last December. The
federal judge then had the job to determine the fair value of Cox?s
shares.

After more than two years since the original
filing, a verdict was handed down June 30. It went quite
differently than the newspaper had expected it to go. The federal
judge ruled the fair value of Cox?s shares was $129.2 million. The
News-Journal had contended the shares had a value of $29.4 million,
based on what the company would be worth if it continued operating
the way it had been.

Last Friday, July 21, Cox Enterprises and the
News-Journal each filed payment proposals. At some point, oral
arguments will be held in the federal court about each proposal. A
News-Journal story that appeared on the newspaper?s Web site July
5, stated, “the newspaper likely would be forced to sell all or
some of its assets,” if forced to pay what the court ordered.

Just how all of this will affect the
News-Journal Center is still not known.

Jon Kaney, general counsel for the newspaper,
would not comment. His office simply said, “we are not commenting
on anything.”

Another article on the newspaper?s Web site,
dated July 5, gave clear indications the newspaper would appeal the
federal court?s decision.

The comment from the Cox team was: “The Cox
family of businesses has a longstanding history of commitment to
the arts, both through monetary donations and support through
public service announcements.”

Meanwhile, business continues at the center. The
News-Journal Center has two halls with seating capacities of 859 in
the main hall and 250 in the smaller studio center. The two major
tenants are the Seaside Music Theater and the University of Central
Florida, which is using the facility for their masters program in
musical theater.

Lively Arts Center Inc. is the nonprofit
organization that built the facility. Rand said all the funding for
the building has been raised, except for about $2.5 million of
their $3 million endowment. Although actual construction costs was
$23 million, addition of the soft costs and the $3 million
endowment brings the total to $29 million. ? Pam Sherborne

Interviewed for this story: Julie Rand,
386-226-1888; Jon Kaney?s office, 386-255-1811; Cox Enterprises,
813-228-0652