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New details about The San Diego Union-Tribune’s pending sale emerged in media coverage late Wednesday, as the newspaper’s CEO was quoted as saying the company isn’t reliably profitable and a major player in the purchase predicted “severances.”
It’s been unclear whether the U-T has been making a profit in recent months amid a 40-percent decline in advertising revenue since 2006. U-T CEO Gene Bell reluctantly put that issue to rest, the Associated Press reported:
Asked at a staff meeting Wednesday whether the newspaper was profitable, Bell said he didn’t want to answer, then, after a pause, “It depends on the week.”
But The New York Times quoted Mark Barnhill, an executive at Platinum Equity, as saying, “The newspaper was profitable in 2008, and it is still profitable now, but it is really close to the edge.”
The New York Times story also said the sale includes “two small weekly newspapers.”
One of the U-T’s weeklies, the weekly Borrego Sun, is being sold to a part-time Borrego Springs resident. The U-T also publishes Enlace, a weekly Spanish-language newspaper; its fate is unclear.
Meanwhile, the post-mortem over the U-T’s sale continued online as critics roasted the newspaper’s Republican slant and yet another analyst issued a gloomy prediction about the fate of its employees:
- Liberal-leaning observers bemoaned the U-T’s conservatism to longtime Los Angeles Times local correspondent Tony Perry in an evening blog post.
“The Copley influence has been huge in this town, but no progressive would count it as having been beneficial,” City Club of San Diego founder George Mitrovich told the Times. Once publisher James Copley died in 1973, Mitrovich said, “the paper underwent a gradual evolution but it never fully lost its conservative view of the world, or its deep-seated Republican bias.”
San Diego Mesa College political science professor Carl Luna said that without a strong publisher, “it’s fallen to the editorial page to carry the Republican message and they seem to be talking about a world that no longer exists, as if it’s 1985 and Morning in America again.”
- Comments by readers on the U-T website were almost uniformly caustic after the news broke late Wednesday morning. After a few hours of posts like “What will wrap the fish in now? (sic)” and “U/T – Don’t go away mad, just go away!,” the comment section was disabled.
It was enabled again in the evening, then disabled after another 10 comments were posted, including one that said “So…..we gonna get some real news now or go harder left?
- Former newspaper executive Alan Mutter weighed in on his blog in a post titled “Signs of life — and more cuts — in San Diego”:
Back in the day, would-be purchasers would have swarmed the Union-Tribune and bid the price to the stratosphere. Prior to her death in 2004, just about every publishing CEO in America would schlep to La Jolla on his private jet once or twice a year to beg the late owner, Helen Copley, to sell the paper to him, money being no object. …
Private-equity buyers like Platinum focus on cost cutting in the early days after they buy a company to be sure they are able to produce sufficient profits to repay the debt they borrow to finance a deal. If they fail to do so, the deal can go sour, as occurred in the bankruptcies that quickly followed the buyouts of the Tribune Co., Minneapolis Star Tribune and Philadelphia Newspapers LLC.
In the fullness of time, Platinum also would hope to raise revenues through improved sales management and an eventual uptick in the general economy. Financially oriented buyers like Platinum generally plan to sell a refurbished company for a handsome profit within three to seven years after they buy it.
- Gary Scott, a producer at Los Angeles public radio station KCRW and a former newspaper reporter, tried to gaze through the haze of the press release announcing the sale:
Officials at Platinum have swaddled the sale in vapid business lingo, which offers little to chew on. For example: “Louis Samson, the Platinum Equity principal leading the Union-Tribune acquisition, called the newspaper ‘a good fit for Platinum’ and its operations-focused approach.”
- The blogger at Spandiego posted a note about the U-T’s pending sale with this headline: “U-T sold; buyer insane.”
“Either they’re the stupidest investment firm in the history of investing or they know something no one else does,” the blogger writes.