Explaining Southern California's economy

Bankers talk to bankers about possible LA Times sale

Kevork Djansezian/AP

The Los Angeles Times building. Parent company Tribune could sell they newspaper on emerging from bankruptcy.

Bloomberg reported Tuesday that Tribune Co., owner of the L.A. Times along with the Chicago Tribune and six other newspapers, is "talking to bankers about a possible sale" of the newspaper properties. 

Media watchers swiftly named Rupert Murdoch as a potential buyer, as has already been widely speculated, here at the DeBord Report and pretty much everywhere else that's following the prospective new owernship of Tribune's newspapers.

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.

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Could Rupert Murdoch buy both the LA Times and the Financial Times?

Rupert Murdoch Delivers Keynote At The National Summit On Education Reform

Justin Sullivan/Getty Images

Rupert Murdoch at the National Summit on Education Reform on Oct. 14, 2011 in San Francisco. Could he buy both the Wall Street Journal of England and the L.A. Times?

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.

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