L.A. billionaires bid on Tribune
Newspaper rack outside the Los Angeles Times building
KAI RYSSDAL: I don't know if this is this week's journalistic sign of the apocalypse or not. But it wasn't CNN or the Associated Press that broke the news this morning Donald Rumsfeld is resigning. Seems some bloggers over at Comedy Central had it first. Maybe they're just plugged in way better than we think they are. Or traditional journalism's in more trouble that anybody thought.
That's true of newspapers. The one in this town in particular. The Los Angeles Times has lost its top two executives over job cuts in the past month. Job cuts parent company Tribune demanded but that the publisher and editor refused to make. Investors have been pressing Tribune, based out of Chicago, to stop its sliding stock price. There was word today two Los Angeles billionaires want to buy it. The Times, the Chicago Tribune newspaper, the Chicago Cubs. The whole thing. Sarah Gardner reports.
SARAH GARDNER: The offer from Broad and Burkle has been described as competitive. The Tribune began accepting bids recently but only got several low offers from private equity firms.
The two L.A. billionaires have long expressed interest in buying the L.A. Times, saying the paper would benefit from local ownership. Analysts were surprised the two had made a bid for the entire company. James Goss at Barrington Research says the L.A. market is complex and even local owners will be challenged to run The Times successfully.
JAMES GOSS: You're a very diverse community, spread out geographically, culturally diverse. And in serving a broad and diverse market there are challenges.
Goss says the L.A. Times alone might be worth around $2 billion. The bid from Broad and Burkle comes one day after news that L.A. Times Editor Dean Baquet had been forced to resign. Baquet had resisted staff cuts that Tribune management in Chicago wanted to impose on the L.A. newsroom.
Former Times Publisher Jeffrey Johnson was forced out over the same issue last month. Some civic leaders in Los Angeles have wondered aloud whether local owners would focus more journalistic standards than profits.
If Burkle and Broad's bid goes forward, it'll be the Chicago Tribune's turn to debate the merits of local ownership.
I'm Sarah Gardner for Marketplace.