When we last checked in on the Tribune Co.'s post-bankruptcy plans for its newspapers, which include the Los Angeles Times, bankers were taking with bankers.
We now know who those bankers are. The Wall Street Journal and CNBC report that it's J.P. Morgan Chase & Co. and a smaller investment bank, Evercore Partners, which counts among its founders Austin Beutner, who is a former Deputy L.A. Mayor and mayoral candidate.
J.P Morgan is a household name in finance. But Evercore is less well known — and something of a throwback. While investment banks went bankrupt and were absorbed by rivals during the financial crisis, Evercore focused on the old-school client advisory side of the business. In doing so, it's become what Lazard Frères was back in its 1970s and '80s heyday: an investment bank that would probably never be accused of calling it clients "muppets," as Goldman Sachs infamously was last year.
This news has an odd wrinkle, however. The investment banking arm of J.P. Morgan could be helping the private equity arm of J.P Morgan sell some of the properties that the firm controls by virtue of its stake in Tribune's bankruptcy. I wrote about this last December:
What's interesting here is that Tribune Co. is effectively owned at this point by bankers. To be specific, J.P. Morgan Chase, L.A.-based Oaktree Capital Management (a private equity firm), and Angelo, Gordon & Co. (a specialist in distressed newspaper debt). So you have the unsurprising event of Tribune electing to put some or all of its newspapers up for sale to avoid the challenge of reviving that form of media from a long-term structural decline. That's happening right alongside the odd specter of bankers, at some level, talking to yet more bankers about how much the papers are worth and who might buy them.
The whole point of this exercise it to figure out how much the newspapers , individually and collectively, are worth; and who might want to buy them, in whole or in part. At this point, it's definitely looking like Tribune wants to shed the papers while there are some obvious deep-pocket potential buyers in the market.
The WSJ runs down a list of usual suspects who like ink on paper: Rupert Murdoch;local power players Eli Broad and David Geffen; billionaire investor Warren Buffett; and Aaron Kushner, who bought the OC Register last year and might have designs on a Southern California newspaper micro-empire.
A price tag that's often surfaced for the L.A. Times is $1 billion. Murdoch has the money to cover that without breaking a sweat — but there could be regulatory issues to contend with, given his other newspaper and broadcast holdings, including the local Fox affiliate, KTTV. But there is a precedent: Tribune has been allowed to operate the Times and KTLA in this market.
Given the ordeal that the L.A. Times has endured over the past few years, Angelenos will be keeping a close eye on this deal as it develops.