Owners of Southern California dailies eye Tribune papers-sources

Wed Dec 12, 2012 4:25am IST

Stocks

   

* Tribune looks to sell papers after Ch. 11-sources

* Tribune to focus on its TV station business-sources

* San Diego Union-Tribune owner interested-sources

* Orange County Register owner, News Corp also interested

By Jennifer Saba and Ronald Grover

NEW YORK/LOS ANGELES Dec 11 (Reuters) - San Diego Union-Tribune owner Doug Manchester and Orange County Register owner Aaron Kushner are interested in acquiring Tribune's stable of newspapers, according to people familiar with the situation.

The Tribune Co, owner of the Los Angeles Times and the Chicago Tribune, will be seeking buyers for its newspapers once it emerges from bankruptcy, expected by Dec. 31, these sources said.

Oaktree Capital Management, JPMorgan Chase & Co and Angelo, Gordon & Co, the controlling Tribune owners, made the decision to sell off its print business to focus instead on Tribune's television stations in cities like Chicago, New York, and Seattle, sources said.

Tribune could grab interest for its publishing assets that include the Baltimore Sun and the Orlando Tribune, from other bidders such as News Corp's Rupert Murdoch, sources said.

"If they should become available, we are prepared to take a serious look at purchasing some or all of them if the terms are healthy and we believe, market by market, that we can reverse the downward trajectory of advertising and circulation," Kushner, head of Freedom Communications, said in a statement.

Freedom Communication already owns the Orange County Register and getting hold of the Tribune's Los Angeles Times would give Kushner a nice one-two punch in the Southern California market.

But Kushner cautioned that talk of the sale is premature.

News Corp and Tribune declined to comment. Manchester did not immediately respond to comment. Oaktree Capital Management and Angelo Gordon were not immediately available to comment. JP Morgan declined to comment.

Manchester bought the San Diego Union-Tribune from Platinum Equity in 2011 for more than $100 million, according to a New York Times report about the purchase.

The hotel and convention center developer, who refers to himself as "Papa" Doug Manchester and a "true industrialist" on his company Manchester Financial's website, has been a controversial owner of the Union-Tribune given his outside business activities in the city.

John Lynch, a former salesman for the Chicago Tribune, was an investor in the team led by Manchester to acquire the Union-Tribune. Lynch currently serves as chief executive of the paper.

According to a Nov. 26 article in the American Journalism Review, Lynch noted that the group acquired the North County Times and was interested in buying other papers. Lynch, according to the article, "did not rule out making a run at his former employer."

Lynch did not respond to a call seeking comment.

News Corp is undergoing a corporate makeover to split its publishing assets from its entertainment division in a process likely to occur by early summer.

In addition to newspapers, Tribune also owns WGN America, a national news feed of its Chicago station, which it repackages as a super-station and distributes through cable and satellite to more than 76 million homes, according to Nielsen Co. data.

Tribune's TV operations are estimated to account for $2.85 billion of the company's $7 billion valuation, while its publishing assets are estimated to represent $623 million, according to report by its financial advisor Lazard. The rest of its value resides in other assets including its stake in the Food Network and its cash balance.

Despite its low valuation relative to the rest of the company's assets, Tribune's newspaper unit is profitable.

To guide the company, Tribune's owners are expected to name industry veteran Peter Liguori, a former Fox and Discovery Communications executive, as its CEO once it emerges from bankruptcy.

The owners are also negotiating with Peter Murphy, Walt Disney Co's former top strategic planner, to become its chief operating officer, said two people with knowledge of the talks. Before becoming Disney's top planning executive, Murphy was chief financial officer of its ABC television unit.

Tribune's move to shed its newspaper assets was expected by observers, who have noted the twin challenges wracking the newspaper industry of declining readership and a plunge in advertising revenue.

The industry lost almost half of its advertising revenue in a five-year period and is now down to $24 billion, according to the industry trade organization the Newspaper Association of America

Indeed, the declining fundamentals of newspapers coupled with the large amount of debt Tribune carried forced it into a long and complicated four year bankruptcy case.

Sam Zell took control of Tribune in 2007 through a leveraged buyout that saddled it with $13 billion in debt just as the newspaper industry hit its downturn.

News of Tribune seeking bankers to sell its newspapers was first reported by Bloomberg.

REUTERS EXCLUSIVE

Reuters Showcase

Documents' Leak

Documents' Leak

India widens oil leaks probe to defence ministry  Full Article 

Jim O’Neill Interview

Jim O’Neill Interview

'India can become world’s fifth-largest economy by decade’s end'  Full Article 

Food Security

Food Security

India will not cut multi-billion dollar food handout programme - PM  Full Article 

Ola's Expansion Drive

Ola's Expansion Drive

Taxi group Ola steps up expansion drive  Full Article 

Sahara Saga

Sahara Saga

Sahara's Grosvenor House hotel in London put up for sale   Full Article 

Suzlon Energy

Suzlon Energy

Suzlon expects to turn profitable in fiscal 2016: chairman   Full Article 

Eicher Motors Stake

Eicher Motors Stake

Volvo selling up to $300 mln worth of Eicher shares  Full Article 

Beef Trade

Beef Trade

Maharashtra clamps down on beef trade through new act  Full Article 

Budget 2015

Budget 2015

Budget announcements and reactions from the industry  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage