Commentary

Bidding War For Tribune Framed As Moral Choice

Tribune Publishing has become the target in a bidding war posited as a choice between a greedy hedge fund and a benevolent group of wealthy individuals.

Many of the pleas for a more-caring owner have come from editorial staffers at Tribune's papers, which include the Chicago Tribune, New York Daily News and Baltimore Sun.

Hotel magnate Stewart Bainum and Swiss billionaire Hansjörg Wyss this month submitted a fully financed offer of $680 million for Tribune, overtaking the $635 million offered by hedge fund Alden Global Capital. The higher offer, if approved, potentially would keep the company's papers out of the hands of Alden's MediaNews Group, which owns about 70 dailies throughout the U.S., including The Denver Post, San Jose Mercury News and St. Paul Pioneer Press.
The hostility toward Alden is palpable, as seen with a recent commentary by the editorial board of the Orlando Sentinel, a Tribune-owned paper that serves a fast-growing region with 2.6 million residents.
“These are perilous times for the news business, from the proliferation of lies posing as news to greedy hedge funds sucking newspapers dry," according to the op-ed. "Our deepest hope is that the investors who are emerging as a possible antidote to Alden will prevail, so the Orlando Sentinel and other Tribune Publishing newspapers can continue serving the public by reporting the news, and keeping you informed.”
In the past decade, Alden has cut newsroom staff by more than 75% at many of its papers, earning the enmity of countless journalists. The Norristown Times Herald in Pennsylvania was whittled down from 45 newsroom staffers in 2012 to just five currently, according to the News Guild data cited by The Wall Street Journal.
An interesting part of Bainum and Wyss's plan is to break up Tribune's portfolio of papers by selling them to benevolent owners. Bainum wants to keep control of the Baltimore Sun in his home state of Maryland, while Wyss wants to own the Chicago Tribune.
As the Orlando Sentinel argues, a benevolent billionaire who demonstrates concern for a newspaper's vital role in a community is ideal. Of course, operating a profitable business also is ideal to ensure the long-term viability of a media outlet.
Amazon founder Jeff Bezos has said The Washington Post, which he bought in 2013 for $250 million, became profitable three years later after taking steps to harden its paywall and develop original content.
“We’ve grown our way into profitability instead of shrinking our way into profitability,” he said, describing how the newspaper had reversed years of job cuts by adding reporters and expanding its technology team. "You can’t shrink your way into relevance."
What remains to be seen is whether a similar model can apply to papers in smaller markets, as they adjust their business models to be more dependent on subscription revenue.

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