BY DIETER BRADBURY

MaineToday Media, Inc.

The investment group that hopes to buy the MaineToday Media, Inc. includes partners with experience in newspapers and new media, as well as close family, business and political ties in Bangor.

Robert Baldacci, one of four key partners in Maine Media Investments, said Thursday the group is eager to invest in Maine newspapers and optimistic that the Blethen properties, including the Portland Press Herald/Maine Sunday Telegram, have a healthy future.

"The conventional wisdom is that the newspaper business is a dying business," said Baldacci, a lawyer, developer and brother of Gov. John Baldacci. "We don't think that's the case."

In addition to Baldacci, the key partners in the investment group include former U.S. Sen. and Defense Secretary William S. Cohen and his son, Kevin; investor and developer Michael Liberty; and Richard L. Connor, a newspaper publisher and editor.

With the exception of Liberty, who is from Gray, all of the partners are from Bangor, and several have been involved in previous business ventures, Baldacci said.

"It's not a group of four different people who have had little or nothing to do with each other coming together," Baldacci said. "This is a group with strong ties to Maine."

MaineToday Media, Inc. announced Wednesday that it had reached an agreement that gives the group exclusive right to negotiate the terms of a sale. Neither side would discuss the length of the agreement or the prospective purchase price of the Blethen holdings.

Connor, 61, the editor and publisher of the Wilkes-Barre (Pa.) Times Leader, will be the chief operating partner in the investment group.

Connor said he does not know yet whether he will want to hold the positions of editor or publisher in Maine and does not have an operating plan for the newspapers.

"We have to make this acquisition, and we have to get comfortable with it, and then we'll tackle the operational issues," said Connor.

The Times Leader has a circulation of about 45,000 daily and 55,000 Sunday. Connor has also been publisher of the Fort Worth (Texas) Star-Telegram, and in the 1990s he founded a company that owned two dailies and 70 weeklies in four states.

In addition to the Portland Press Herald/Maine Sunday Telegram, the Blethen properties include two other daily newspapers, the Kennebec Journal in Augusta and the Morning Sentinel in Waterville. Additional holdings include the weekly Coastal Journal in Bath, nondaily print publications and MaineToday.com.

The Portland newspaper has a circulation of about 70,000 daily and 115,000 Sunday. The Kennebec Journal has daily and Sunday circulations of about 13,000, and the Morning Sentinel has daily and Sunday circulations of about 17,000.

Connor assembled a group of investors to purchase the Times Leader in Wilkes-Barre in 2006 from the McClatchy Co. for $65 million. The investors formed Wilkes-Barre Publishing Co., which also owns four weeklies in Pennsylvania. Connor is the company's chief executive officer.

With Connor at the helm, the Times Leader reported circulation increases in 2008, in a community with another daily newspaper, and at a time when most newspapers are struggling with circulation declines.

"There's not one ounce of me that believes that newspapers are a thing of the past and are going away," Connor said. "I don't believe it intuitively and I don't believe it based on the reactions of the public to the things we write about, photograph and print."

Kevin Cohen, another partner, is a founder of DoubleMan Media, a firm that provides consulting services in content acquisition, strategic planning, business development and capital generation to early-stage media and technology companies.

Kevin Cohen said he could not discuss his role in the Blethen properties, if the acquisition goes through, because negotiations are just getting under way. But he said the company's Web site and technology assets "certainly have an interest for me, given my perspective and my background."

Robert Baldacci is best known in southern Maine as a vice president of Ocean Properties, one of two companies that submitted competing $100 million bids to redevelop Portland's Maine State Pier. Baldacci's company was not chosen by the Portland City Council.

Baldacci said his family and the Cohen family have known each other and Connor for some time, since all of them have lived or worked in Bangor. The Cohen and Baldacci families both owned restaurants, he noted, and he and William Cohen have been involved in several business ventures with Liberty.

Liberty is well known in Maine business and development circles. In the 1980s he developed several high-profile Portland properties, including 100 Middle Street Plaza and Chandler's Wharf.

In 1997 he put together a team of investors to buy Biddeford Textile, and more recently he was part of a joint venture that proposed a $100 million Westin Hotel development at the former Jordan Meats plant.

Liberty has also been the subject of controversy. Most recently, in 2006 the Securities and Exchange Commission filed a civil suit against him and two business associates for allegedly misappropriating $9 million from an investment fund.

Dennis Bailey, a spokesman for the investment group, said Liberty has told him the SEC matter has been settled. "But I think he's restricted from saying too much under the terms of the agreement," Bailey said.

Kingdon Kase, an SEC litigator in Philadelphia, said the suit is still pending on the SEC docket, and the commission has not approved any settlements with Liberty. He said he could not comment on whether a settlement was under discussion or awaiting SEC approval.

Liberty did not return a phone call seeking comment Thursday.

Baldacci said he is familiar with the case and has every confidence in Liberty. He said Liberty's legal problems were in no way a deterrent from including him as a partner in the investment group.

"We're well aware of what has been reported in the papers in the past, and some of the crises and issues he's had to deal with, but there's always another side to the story," he said.

Baldacci said he expects Liberty will be involved in helping to set up an employee stock option plan, which would give newspaper employees an ownership stake in the Blethen properties.

However, he said the partners would also be seeking concessions from The Newspaper Guild, the union which represents about 350 employees at the Portland and Waterville newspapers.

"The model that's in place now makes it very difficult to sustain a successful operation," Baldacci said. "This is going to be a partnership where we are going to be looking for some changes."

Tom Bell, president of The Portland Newspaper Guild Local 128, said in a written statement that union members were enthusiastic about the opportunity for new ownership.

"This industry and this newspaper need to come up with game-changing ideas," said Bell. "We have always felt that local investors working in partnership with employees who have an ownership stake would be the best way to ensure the future of the newspaper in these challenging times."

The Blethen Maine holdings were put on the market in March. In announcing their intent to sell, the Blethen family, which owns the Seattle Times, cited declining revenues and outstanding debt. Two rounds of layoffs have taken place since the announcement , and more layoffs are pending later this month.