The Breakdown

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Who is Revolution Capital, and what does it want with the Tampa Tribune?

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It's the one paper that billionaire investor Warren Buffett didn't want: the Tampa Tribune. Buffett's Berkshire Hathaway made a counterintuitive deal back earlier this year — counterintuitive because observers tend to believe the newspaper business is not very good — shelling out $146 million for pretty much everything else that Tampa Trib owner Media General prints on paper.

Other investors couldn't help but notice Buffett's interest in newspapers. One of them, Boston greeting-card tycoon Aaron Kushner, bought the Orange Country Register and the remaining assets of Freedom Communications, for an as-yet undisclosed sum, in June. 

Now a private-equity firm based in Los Angeles has paid a fire-sale price of $9.5 million for the Tampa Trib. It's been on the losing end of a circulation battle with the Tampa Bay Times (daily circ for the Trib has declined by double digits since 2011). Revolution Capital appears to be something of a spinoff from Platinum Equity, the L.A. shop run by Tom Gores (number 15 on the L.A. Business Journal's ranking of the 50 Wealthiest Angelenos). Revolution's founder and managing director, Robert Loring, labored for a time at Platinum, in the M&A division. 

Platinum bought the San-Diego Union Tribune in 2009 for "less than $50 million," according to the Wall Street Journal, and sold it in 2011 for a reported $110 million.

All this action in the newspaper business — as properties nationwide confront advertising slumps, circulation declines, bankruptcy, the massive disruption of the Internet and, on the plus side, the arrival of paywalls to prevent continued free online access to content — should remind Angelenos that Tribune Co. is gradually emerging from a long Chapter 11 process. 

The Chicago Tribune checked in recently with the state of those assets and focused on another Los Angeles-based private equity firm, Oaktree Capital Management - one of the creditors to control Tribune's destiny. Included in that is the fate of the Los Angeles Times. This is from the Chicago Tribune's report:

"It has some very good assets, and we think that through the purchase of the distressed debt, we were able to buy those assets at attractive prices," said Howard Marks, 66, chairman and co-founder of Los Angeles-based Oaktree, speaking by phone from the firm's London office, where he spends a third of the year. "And now the next stage of the investment will be about what those assets can be made to be worth."

The estimated worth is $4.5 billion — but the newspapers are worth less than $700 million. Tribune's broadcast properties are generating cash. So the playbook might be to sell off the newspapers and keep the rest. Among those newspapers that could be for sale, the L.A. Times would be at the top of a value proposition. Numerous local moneymen have suggested in the past that they could be L.A. Times buyers. Oaktree has to be eyeing - with great interest - the moves that Buffett, Platinum, and the likes of Kushner — people with money to wager on some sort of newspaper business comeback.

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.

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