‘Are you safe?’ I sent this one line email to three friends the moment the acquisition of Mediaspan by Newscycle became public (writes John Juliano).

The first responded immediately, “Yes. Let’s speak once everything calms down.” The second, to an old, old friend in the UK, was answered, “not sure, waiting to see contract.” The same, from an American, who I still think of as a young man because we met when he was in his early 20s, 20 years ago.

As of today, they are all ‘safe’. My British friend worries less because ‘‘non-competes,’’ which are so prevalent here in the USA, are illegal there. He will never have to make the decision about whether to sign a non-compete to keep this position, while trading away his ability to work in his chosen industry should his employer decide to exercise their “at will” option.

If you don’t live in the States, this may sound like a barbaric practice. It is common to agree not to work for any competitor for some length of time, often two years, should you no longer work for your current employer. Oftentimes working for a European company relieves one from having to make such a choice. Non-competes can sometimes be negotiated around, but Americans oftentimes sign whatever’s put before them. Once, I did not hire a very talented woman once because she had signed such an agreement. Although my legal friends told me it would be unenforceable, her former employer was on the phone to me before I had made an offer to her, threatening me with legal action, the expense of which, even if

I had won, would have made her employment unprofitable.

Leaving non-competes aside, we’ve seen yet another major vendor disappear, and the apparent implosion of Digital First Media. Is there a message to be gained from the two events? (This will actually be the subject of a lunch I’m hosting in Chicago for a group of newspaper executives.)

At first glance they seem to be counter indicative. The acquisition of yet another vendor by Newscycle can be viewed as being very bullish on our industry. If the rumors that abound have any validity at all, Vista Partners, the fund behind Newscycle, has spent more than US$150 million so far.

The story being told by those inside of DFM is much more interesting. Where I and so many others see an implosion and failure, those I’ve spoken to – who I count as friends – tell the exact opposite story. DFM is a victim of its own success!

This is a consistent story: DFM hit its sale price and the story’s over. Period. There’s no more to tell.

According to my contacts, the DFM properties were bought on a multiple of 2-to-1. They’re now valued at between five- and 7-to-1, and it’s time to sell. Doing the arithmetic, it’s easy to see that even if the valuation had dropped by 50%, the profit is more than a 50 per cent return and as you go up from there the profit looks better and better.

That there was surprise that the fund that owns DFM would do such a thing is difficult for me to get over. Inside DFM, I heard such things as, ‘‘I can’t believe this is happening when we are being so successful.’’ ‘‘The problem is that we were too successful.’’

The real problem seems to be that the investors were very honest: They were in the deal to make a certain amount of money, when they can make that amount of money, they sell and move on.

The people at DFM are my friends. Like my friends at Mediaspan, I’m interested in what will happen to them next. It seems, as is often true in these things, a few players end up with all the equity, and those who thought they were in and protected were not. I’m told that when DFM declared bankruptcy in 2012, my friends lost all of their equity. One told me he couldn’t believe he had been that naïve. The other said something akin to, “on to the next venture”… and then told me he was investigating opportunities on a different continent.

DFM is apparently being cut up because there is no buyer able to swallow the entire fish in one gulp. I’m led to believe there are more than enough buyers willing to pay a good multiple. This speaks well of the stability of the buyers, who are said to be other newspaper chains in the main, and of their view of our industry in the USA.

With our industry in such turmoil – and in turmoil there is opportunity – I wondered why anyone would come work in it. To find out, I called a number of people in their 20s and 30s who have joined our industry and asked why. The people I called were evenly split between vendors to the industry and people working in the industry. The answers shouldn’t have surprised me, because they are the exact same answers that my peers would give if I were to ask them.

Journalists and editors joined our industry because they believe in it. Everyone I spoke to was unanimous in this. The answers ranged from “I am a fifth-generation newspaper person,” to “I believe in the importance of a newspaper to keep the local community informed.” One man was married to another journalist. Together they seem to reinforce each other’s belief in the importance of their calling.

People like me on the vendor side, seemed to get there by happenstance. One took a job with a newspaper products supplier because she wasn’t licensed to work in her chosen profession in the city where her partner pursued an opportunity. Others were looking for jobs that matched their skills and the vendor where they are working is the vendor who made the best offer. I work in newspapers now because there was a certain technology I wanted to use in a certain way. A now-long-defunct newspaper industry vendor was looking for someone who was an expert in that certain technology and wanted to use it in the same way.

There’s a new management phrase floating around the USA, LCHO; it’s pronounced el-co and it stands for low-cost, high opportunity. I’m told it is the term for hiring very young people straight out of school. I’m told it’s used to get rid of experienced high cost talent. Being experienced talent, I see this as a debased and evil thing to do.

The American job market is very tight and new graduates have a difficult time finding a job. As a new graduate, I would see this as an opportunity for me to demonstrate the value of my education. When I was a teenager, American companies passed rules of forced retirement at age 65. The rules were positioned as a corporate initiative to allow the younger generation (baby boomers) to enter the workforce.

What goes around, comes around. But now, I wonder how much corporate responsibility to the community was really a factor and whether it was just LCHO without a corporate acronym.

Although there seem to be human casualties along the way, all the signs are of a strengthening industry that is attracting investment and new young blood. gx

• Newspaper systems industry veteran John Juliano writes regularly for GXpress Magazine. He is North American vice president of business development at Miles 33. Contact him at john@jjcs.com