One of the nation’s most voracious media giants has made a bid for the company that owns the Los Angeles Times and the San Diego Union Tribune, and if the deal is done, California’s newspaper economy would be almost entirely in the hands of two corporations known for ruthless labor relations and replacing local content with stories derived from others newspapers in their respective chains.
Gannett Co Inc, publisher of USA Today, said it offered to buy Tribune Publishing Co in a deal valued at about $815 million, including debt, but the owner of the Los Angeles Times and Chicago Tribune refused to begin “constructive” talks.
“We therefore are prepared to consider all alternatives to complete this transaction,” Gannett Chief Executive Robert Dickey said in a letter to Tribune Publishing’s board on Monday.
Tribune Publishing, however, said in a statement that it had told Gannett it would engage financial and legal advisers to review the proposal and its “numerous contingencies.”
Chicago-based Tribune Publishing has been shaking up its top management, replacing its chief executive in February and said a month later that it would replace its chief financial officer.
Gannett, the publisher of USA Today, controls more of the country’s newspaper circulation than any other publisher, and if the company wins control of Tribune publishing, the merger would give them control of more than 17 percent of the nation’s total newspaper circulation.
From the Wall Street Journal:
Digital First, the number two company on the list, controls the largest share of newspaper circulation in California, and owns both the Los Angeles News Group and the Bay Area News Group.
The merger would leave the vast majority of California’s newspaper circulation in the hands of two corporate giants.
More from the New York Times, focusing on problems in Tribune Publishing’s California papers:
In recent years, The Los Angeles Times has become a flash point for disagreement between Tribune Publishing and its California newspapers. Austin Beutner, The Times’s publisher, was ousted last fall after only a year in the position because company executives viewed his ambitious plan to dominate California journalism as defiant and a threat to their centralized strategy. The newsroom has been reduced by job cuts. The philanthropist Eli Broad has long sought to buy the paper, but his moves have been spurned.
In a further sign of discontent between Tribune Publishing and its California newspapers — in addition to The Los Angeles Times, the company also owns The San Diego Union-Tribune — the two entities have sparred over financial projections.
More recently, Tribune Publishing failed in its bid for Freedom Communications, which owns The Orange County Register and The Press-Enterprise of Riverside, Calif., after the Justice Department objected to the deal.
The Wall Street Journal looks at key differences between the two publishing giants:
Gannett owns 107 mostly small- and mid-market U.S. dailies in 34 states, as well as its flagship, USA Today. Last summer, after Gannett was spun off as a newspaper group from television properties that now make up Tegna Inc., Mr. Dickey said the company would aggressively pursue acquisitions of larger market publications.
Tribune Publishing also was separated from television holdings but has struggled to find its footing as an independent company since the split in late 2014, less than two years after its predecessor company emerged from bankruptcy. Tribune owns 11 big dailies in disparate markets that have made it difficult to combine costs as well as others have.
The company has reported declining year-over-year revenue in almost every quarter since the spinoff. Its stock price has tumbled 69% since then, from $24.50 a share to $7.52 at market close Friday. On Monday, following news of the proposal, shares of Tribune Publishing jumped 53% to $11.50.
Back when esnl came to California in 1967, all of the California papers involved were family owned, with the San Diego publications owned by the Copley family and the Los Angeles Times by the Chandlers. Both families are now gone from the business.
Otis Chandler, the last of his family to run the Times, was unique in that for all his considerable imperial ambitions and a reluctance to expose the misdeeds of some of LA’s rich and powerful, under his reign the Times accomplished some remarkable journalism and opened up bureaus on other continents.
He was ousted by his own family, who wanted cash more than Pulitzers, and the paper went steadily downhill until today it’s a mere shadow of what it was when Otis was at the helm.
The San Diego Union and Tribune, then two separate publications, were owned by the Copley family and managed by retired Marine Corps Lt. Gen Victor “Brute” Krulak. Investment bankers took over Copley’s papers, then sold them to Tribune Publishing, leaving California newspaper landscape more consolidated, as well as devastated.