KPCC's business analyst Mark Lacter has the latest on the LA Times' bankruptcy proceedings.
Steve Julian: Mark, it looks like the owner of the Los Angeles Times may finally come of bankruptcy protection -- when did we first start talking about this?
Mark Lacter: It was late 2008, Steve – I think your hair was still dark (I still had some hair); and the Tribune Co. was being run by the real estate mogul Sam Zell, who took control at about the worst possible time in the newspaper business.
Julian: Tribune, just to remind everyone, owns the Times, KTLA Channel 5, and a bunch of other papers and TV stations around the country.
Lacter: Yes, and flash forward to 2012 - Tribune has been in bankruptcy protection for almost four years, an insanely long time for any company, but now it looks as if the reorganization plan will be approved by a federal judge, possibly this month, and Tribune will be out of Chapter 11 later this year. Now, going out this company is going to look a lot different than it looked coming in. Most notably, Zell is out of the picture - Tribune will be owned by its major creditors, which include a bunch of banks, hedge funds, and other investment firms – and none of them is likely to have a long-term interest in owning newspapers.
Julian: What does that mean for the Times?
Lacter: It means that the paper will probably be put up for sale. The big unknown is who might be interested and at what price. About the only person to come forward so far is Eli Broad, the billionaire philanthropist. He said a couple of months ago that he would consider working with a group of foundations or wealthy investors in trying to take local control of the paper. Actually, there's bound to be some interest - fact is, the L.A. Times, for all its struggles, remains a name brand product, an institution really, and that alone has value.
Julian: How's the paper doing?
Lacter: Well, Tribune doesn’t release much financial information. We do know that print circulation is less than 500,000 copies, which is about half what it was in the glory years. Any new owner will have to decide whether to keep operating the place as is - in other words, should there be a print edition seven days a week. The Times-Picayune newspaper in New Orleans recently announced it would discontinue its print edition in favor of a smaller-staffed website. Other papers are considering similar moves, and it wouldn't be out of the question to see the Times reduce or even eliminate the printed product within the next few years.
Julian: Mark, in talking about changes in ownership, we're not limited to the Times.
Lacter: That’s right. Last month came the sale of Freedom Communications, the company that owned the Orange County Register and other papers around the country. Actually, this is a similar situation to what's happening with the L.A. Times. Freedom came out of bankruptcy protection a couple of years ago, and since then it's been selling off assets. The Register, along with a few remaining papers, was sold to an investment group led by a fellow named Aaron Kushner - kind of a mystery man who made much of his money from a greeting card company and recently tried - and failed - to buy the Boston Globe.
Julian: What's he been saying publicly?
Lacter: So far, all the right things about being dedicated to quality journalism, but no one really knows. And this is one of the concerns among journalists about the current market for newspapers: The quality chains are generally not interested in acquisitions, which means that all kinds of buyers are emerging with all sorts of motivations. You see that happening in San Diego, where a developer named Doug Manchester bought the Union-Tribune and is now using the newspaper to trumpet his personal views on taxes, big government, gay marriage, and a new downtown football stadium.
Julian: Isn't this how - quote - "news" papers began?
Lacter: Exactly – we sometimes forget that newspaper owners would often skew coverage to accommodate whatever position they were taking – and sad to say, this could be happening once more.
Mark Lacter is a contributing writer for Los Angeles Magazine and writes the business blog at LA Observed.com.