@rupertmurdoch: “Strong word Tribune newspaper group to be bought by big Wall St firm, LA Times to go to philanthropist Eli Broad and local group” | 12:42 PM - 27 Nov 2015
Will Eli Broad Finally Step In And Save The Los Angeles Times?
The Los Angeles Times Seeks A Savior
By Matt Pressberg, International Business Times | http://bit.ly/1TltAtv
Tribune Publishing denies rumor of L.A. Times sale started by Rupert Murdoch tweet
Jim Puzzanghera | LA Times | http://lat.ms/1XHRJf0
December 02 2015 9:31 AM EST :: LOS ANGELES -- The Los Angeles Times has been steadily downsizing since before corporate raider Sam Zell bought its parent, Chicago’s Tribune Co., and saddled it with billions in debt amid declining ad revenues. But the paper’s most recent bloodletting was still stunning.
A whopping 82 out of about 500 staffers left during the latest round of buyouts, including the paper’s correspondents in London, Las Vegas and Seattle, a slew of veteran editors and longtime columnists Bill Dwyre and Sandy Banks. But now, with the newspaper cut to the bone, is it time at last for that hometown savior to emerge? And if so, will Spring Street finally become Broad City?
Rupert Murdoch tweeted last Friday that he had a “strong word” that Tribune’s newspapers would be acquired by a Wall Street firm, and the Times would go to a local group led by billionaire philanthropist Eli Broad.
Tribune released a statement Monday denying it was pursuing a sale of the company -- but mentioning nothing about the Times. The speculation sent the company’s stock soaring about 18 percent since markets opened Monday.
Broad declined to comment on the rumor to several media outlets, but a source close to him told International Business Times, “I read about it when you did.”
Austin Beutner and Broad tried and failed to buy the paper in March 2013, before the former was installed as publisher, replacing Eddy Hartenstein. Broad told the Los Angeles Business Journal in September that he submitted an offer at the request of Hartenstein, now Tribune Publishing’s chairman, to buy the Times and San Diego Union-Tribune, which Tribune acquired in May. Tribune’s other directors rejected that offer, and Beutner was fired shortly after.
However, the time does seem as ripe as ever for an opportunistic buyer to save the paper from being whittled away even more. One investment banker, who requested anonymity because he has worked with several potential suitors, said he’d be surprised if a deal doesn’t happen soon.
“Where there’s smoke, there’s fire,” he said. “All those guys at one point or another had been talking to one another about a deal. The issue they’re running into is the specific terms. But a guy like Eli Broad -- or a local group led by someone like that -- makes a lot of sense.”
Other usual suspects include media mogul David Geffen and supermarket billionaire Ron Burkle, who have previously circled the Times. Patrick Soon-Shiong, a biotech CEO who’s Los Angeles’ richest man, has also been sniffing around, the investment banker said. And there’s also Bruce Karsh of Oaktree Capital Management, which owns about 18 percent of Tribune Publishing’s stock.
But speculation about the LA Times still begins and ends with Broad. His interest in the paper has been rumored since before Chicago was a dirty word in its newsroom, and the billionaire liberal philanthropist savior storyline is compelling. Analogous situations, like John Henry’s takeover of the Boston Globe and Jeff Bezos’ acquisition of the Washington Post, have resulted in new coverage initiatives and expanded head counts.
The investment banker said the big hurdles for any potential Times deal are mainly lining up acquisition financing and squaring away details like unfunded liabilities, not meeting Tribune’s asking price. He said Broad and all other realistic Times buyers have already done their due diligence and know what the price will be based on comparable transactions, and expects one of the rumored names, most likely Broad, to own the paper before the end of 2016. A “surprise buyer” would shock him, he said.
With a market capitalization of about $250 million and a little more than $400 million in debt, it would take an estimated $650 million or more to acquire Tribune Publishing, which Tribune Co. spun off last year in a move designed to shield its television stations from the financially challenged print business. Tribune Publishing also includes the Chicago Tribune, Orlando Sentinel and Baltimore Sun, along with other smaller publications. Analysts estimate the Times makes up about 40 percent of Tribune Publishing’s revenue. While it may not fetch the $250 million Bezos paid for the Post, the Times should go for significantly more than the $85 million Tribune shelled out for the Union-Tribune, which has less than half the Times' paid circulation.
The stage for the latest exodus was set when Austin Beutner, the former private equity CEO and LA power broker, was fired as publisher of the Times on Sept. 8 after less than a year on the job, allegedly for clashing with the cost-cutting ethos coming from Chicago. He was replaced by Tim Ryan, who came over from the Baltimore Sun.
Beutner’s ouster resulted in a group of 50 civic leaders, including billionaires Broad and Anthony Pritzker and former mayors Richard Riordan and Antonio Villaraigosa, signing a letter to Tribune Publishing in which they expressed their fierce opposition to the publisher change and calling for new, local ownership. The LA County Board of Supervisors even weighed in, passing a unanimous resolution saying the same.
Will Wright, the director of government and public affairs for the American Institute of Architects Los Angeles Chapter -- and one of the civic leaders who signed the letter to Tribune -- said he just hopes the paper can find a local savior before it atrophies even more.
“To not have a publisher, to not have the team of reporters and editors that have a genuine understanding of the nuances of Los Angeles is disheartening,” he said. “Who knows what quality of reporter you will attract to a media empire that doesn’t respect those values. It’s a downward spiral.”
1 Dec. 2115 :: Tribune Publishing Co. on Monday denied a rumor started by media mogul Rupert Murdoch that the news organization was on the verge of being sold, saying it is "not engaged in discussion or a process to sell the company."
Tribune Publishing, which owns the Los Angeles Times, Chicago Tribune and several other newspapers, sent a message to its employees addressing what it called "media speculation."
The speculation began Friday when Murdoch, co-chairman of News Corp., said on Twitter that he had heard Tribune Publishing would be sold and that The Times would be spun off to a local group involving billionaire philanthropist Eli Broad.
"Strong word Tribune newspaper group to be bought by big Wall St firm, LA Times to go to philanthropist Eli Broad and local group," Murdoch tweeted.
Broad on Friday declined comment on the matter.
In its Monday statement, Tribune Publishing said it wanted to address what it called a rumor of a sale.
"While our policy is not to comment on rumors, given the source of this speculation and the fact that it has received considerable public attention, the company believes a statement to employees is warranted," Tribune Publishing said.
"As our board of directors noted earlier this fall, and as we articulated in our November earnings call, Tribune Publishing remains committed to its strategy and transformation plan and is not engaged in discussions or a process to sell the company," the statement said.
"As we finish the important fourth quarter, we appreciate the continued hard work and commitment of our employees,” the statement concluded.
The company was spun off from Tribune Co. in August 2014. Since then, stock in Tribune Publishing has dropped about 62%.
On Monday, Tribune Publishing stock jumped 89 cents, or nearly 10%, to $10.18.
In September, the company abruptly fired Times publisher Austin Beutner. Tribune Publishing Chief Executive Jack Griffin said at the time that Beutner wasn't on the same page as the rest of the company in trying to keep it profitable.
But sources said tension between the two escalated when Broad made overtures to buy The Times.
Since Beutner's ouster, civic and business leaders in Los Angeles have stirred speculation about a sale, calling for local ownership.
Tweet From Rupert Murdoch About Sale Brings a Denial From Tribune
By RAVI SOMAIYA | NY Times | http://nyti.ms/1YIHjyf
NOV. 30, 2015 :: Monday morning, Los Angeles Times employees were greeted with an unusual message from their corporate parent company, Tribune Publishing.
“Over the Thanksgiving weekend a rumor was reported in social media and the press regarding a potential purchase of Tribune Publishing Company,” wrote Matthew Hutchison, a senior vice president for corporate communications. He was referring to a post on Twitter, by Rupert Murdoch, that suggested the company was about to be bought by a big Wall Street firm, while the billionaire philanthropist Eli Broad would take control of The Times.
Tribune Publishing, Mr. Hutchison said, “remains committed to its strategy and transformation plan and is not engaged in discussions or a process to sell the company.”
The exchange was a public hint of behind-the-scenes tumult that has surrounded the company in recent months. In September, The Times’s publisher, Austin Beutner, was fired. Shortly afterward, the company announced staff reductions. In all, 82 newsroom employees left, from a total of about 500, according to a list maintained by staff members.
“The companywide Employee Voluntary Separation Plan was designed to allow employees across all of Tribune Publishing to make the best decisions for their own personal and professional situations, while reinvesting in the areas that will accelerate our transition,” the company said in a statement.
Since the dismissal of Mr. Beutner, a group that includes Mr. Broad, Apollo Global Management and others has been trying to find a way to gain control of the company before further staff cuts erode what they see as the vital core of its newspapers, according to two people with knowledge of the process, who spoke on condition of anonymity.
Mr. Broad, a prominent Angeleno, has retained the investment bank Evercore to explore a purchase. His primary interest is in The Times, and he is seeking a partner for the other newspapers in the group, which include The Baltimore Sun and Chicago Tribune. Apollo is among those interested.
Tribune Publishing executives have declined to meet with potential suitors, or to provide detailed financial information, to the frustration of those suitors, the two people said. Tribune faces pressure from a diminished stock price and the prospect that one of its major shareholders, Oaktree Capital Management, will seek to sell its 18 percent stake in the company.
Any potential discussion about a sale is thus stalled. Mr. Murdoch, who is not directly involved, may have had dated information, one person said.
Tribune Publishing’s stock had risen nearly 8 percent on the rumor of the potential deal.