It’s a trend becoming the norm rather than the exception. Private-equity firms take control of newspapers in an effort to shore up their financial future. Or, they deplete their inner-workings until they’re barely operating shells.
It depends on how you look at it.
In the weeks leading up to its earnings report released yesterday, Tronc Inc., owner of legacy papers like the Chicago Tribune, Baltimore Sun and New York Daily News — which it famously bought for a dollar in 2017, before laying off half its staff just last month — began to consider its own path to private-equity ownership for its titles.
The company saw its stock rally by 17% for the first time in six months after the deal was proposed. Under the proposal, the company would sell shares for $19 to $20, with a value estimated around $700 million.
Tronc is in talks with at least one firm, according to a source who spoke to Bloomberg.
The proposed deal comes after Tronc sold the Los Angeles Times to billionaire Patrick Soon-Shiong in June for $500 million, which left the company with $240 million after settling debts.
Soon-Shiong plans to move the paper to Culver City, Calif., and invest in its digital and print future.
However, should Tronc’s proposed deal go through with a private-equity firm, those remaining papers will join a growing number of others owned by a small group of individuals with a lot of collective money.
Fortress Investment Group LLC, which operates its publishing arm through dedicated unit Gatehouse Media, owns 150 papers, many small, local outlets. While Gatehouse is known to strip the staff and resources of its acquisitions to some extent, Digital First Media, owned by Alden Global Capital LLC, is the most notorious for slashing and burning across its 60 titles, including The Denver Post.
The acquisition of Tronc’s properties would differ, in part, from previous deals, considering some of its big-city newspapers enjoy wider circulations. However, seeing another group of newspapers fall into the hands of moneyed interests, which often focus on quarterly profits versus community concerns, is alarming.
In the past, families often held ownership in newspapers — large and small — for generations. They felt an obligation to the towns and cities they served, forging long-term bonds with readers. Often, they were willing to endure financial losses for the greater good the newspaper(s) represented. That commitment can be imperiled when corporate interests supersede the demands and obligations of a free press.