Bloomberg reported Tuesday that the Financial Times — the Wall Street Journal of England — was being put up for sale, with a price tag of $1.6 billion. The way things are going for newspapers these days, that was an eye-popping number and immediately set off speculation about who might have the deep enough pockets to buy the FT (but not its sister publication in its corporate stable, The Economist).
Given that News Corp. just reported great quarterly earnings and has $10 billion in cash on hand, Rupert Murdoch's name rose to the top of the list. Murdoch already controls the Wall Street Journal and has been talked about as a buyer for the Los Angeles Times and the Chicago Tribune, both owned by Tribune Co.
Tribune is in the process of emerging from bankruptcy and it's expected that the new owners, a group of private-equity funds and investors including L.A.-based Oaktree Capital Management, will want to sell off the newspapers along with their challenged, although not necessarily desperate, economics and concentrate on broadcast operations.
Pearson, which owns the Financial Times, denied that Bloomberg's report was accurate. News Corp.'s day-to-day operations guy, Chase Carey, also dodged questions this week about buying the L.A. Times or the Chicago Tribune, according the L.A. Times itself. But of course the first rule of the acquisitions club is that you never confirm that you're bidding for a property until you're ready to bid.
The ownership scenario if Murdoch does end up buying the FT, along with the L.A. Times, the Financial Times and even the Chicago Tribune too, would give Murdoch wide reach.
Murdoch would find himself with a U.S. newspaper empire that would enable him to cover the West and Midwest, as well as the Northeast. He would have some of the best financial journalism available which could be shared across publications. The L.A. Times' entertainment coverage could make its way into the WSJ. All of this would be a direct threat to the New York Times and its national ambitions, something that would undoubtedly delight Murdoch.
Angelenos would likely benefit from having the L.A. Times in the same newspaper family as the Wall Street Journal and the Financial Times. However, local billionaires, including Eli Broad and David Geffen, have shown an interest in the paper before. Sam Zell's ill-fated takeover in 2007 put an end to that, but L.A.'s moneyed elite could decide that the hometown paper is too valuable to trust to a controversial figure like Murdoch, especially after the British phone-hacking scandal that landed Murdoch in front of Parliament to explain the allegedly criminal activities of his employees. A bidding war isn't out of the question.
Murdoch intends to divide News Corp., which also owns Fox, into two companies next year. His timing could be perfect, as that may be right around the time that Tribune Co.'s owners are ready to start selling. But as 2012 winds down, it's starting to look like 2013 is going to be a lively year in the newspaper business, with L.A. right in the middle of the fun.