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Unexpected white knight emerges for Tribune Publishing

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The plot thickens around the future of Tribune Publishing owner of Chicago Tribune, the New York Daily News and others papers.

In the latest twist, biotech billionaire Dr. Patrick Soon-Shiong, the LA times owner with a 24-percent stake in Tribune, dashed any lingering hope that he’d emerge as a white knight for the beleaguered newspaper empire during a March 12 interview on Bloomberg TV.

But then Maryland business man Stewart Bainum Jr. — chairman of Choice Hotel International, which owns the Quality Inns chain — emerged as a potential buyer for the entire chain of papers. Previously, Bainum was eyeing just the Baltimore Sun and smaller papers in Maryland.

The ups and downs follow Tribune’s controversial move last month to agree to sell to slash-and-burn hedge fund Alden Global Capital, which owns 32 percent of the public stock, in a deal valued at $630 million or $17.25 a share. The deal means Alden would acquire the rest of the company it does not already own for $431 million.

As part of the deal, the board and Alden agreed to sell the Baltimore Sun, the Capitol Gazette and some weekly Maryland papers to Bainum for $65 million, who would run them as a not-for-profit via a trust.

But this week it emerged that Alden had made such high demands on its shared services contract at up to $12 million a year that Bainum began exploring an acquisition of the whole shebang, according to reports.

On Monday, after-market trading pushed the stock to $17.30 a share — above the $17.25 that Alden was offering. On Tuesday, the stock spiked up to $17.58 a share at one point, before closing at $17.19, down 9 cents.

“Stewart is a serious guy with a deep interest in the importance of local news,” said Jim Friedlich, a media executive and head of the Lensfest Institute for Journalism not-for-profit that owns the Philadelphia Inquirer. “Stewart’s main interest has been and remains the purchase of the Baltimore Sun, but he seems both sincere in his offer and fully capable of pursuing the whole of Tribune.”

Friedlich, who has consulted with Bainum about not-for-profit models and investments needed to fund digital transitions of aging metro newspapers, added: “He and his family have succeeded quite handsomely in the both the hotel and senior care industry, so both the resources and business sophistication are very much in place.”

Bainum didn’t return an e-mail from Media Ink seeking comment. A spokesman for the special committee of the Tribune board declined to comment.

The News Guild, which represents newsroom employees at most Tribune-owned publications including the Hartford Courant, the Orlando Sentinel and the struggling Daily News, is now cheering for Bainum to displace Alden as Tribune’s main suitor. Alden is known for vicious cost cutting at other papers it owns via its Media News/Digital First Media operations, including the Denver Post, the Boston Herald, the Orange Country Register and the Mercury News in San Jose.

“The NewsGuild is excited by reporting that Stewart Bainum Jr. may try to bid for all of Tribune Publishing,” said Jon Schleuss, president of the News Guild-Communications Workers of America. “Right now Alden Global Capital, a hedge fund with a track record of destroying newsrooms, is trying to take over the company and that would be devastating for the workers, the publications and the communities they serve.”

Early in the process, some media watchers had speculated that Soon-Shiong might ride to the rescue given his 24-percent stake in the publicly traded Tribune as Alden would need his OK to gain majority full control and take the company private.

Patrick Soon-Shiong
Patrick Soon-Shiong dashed any lingering hope that he’d emerge as a white knight for Tribune.
Bloomberg via Getty Images

But the biotech billionaire who bought the LA Times and San Diego Union Tribune from Tribune for $500 million in June 2018 squashed that notion in a March 12 interview on Bloomberg TV. When asked if he was interested in expanding beyond the LA Times and San Diego Union Tribune, he replied, “I think I have my hands full.”

“I think the LA Times, Washington Post, New York Times and Wall Street Journal will be the surviving, unfortunately, newspapers of record in the United States.”

He once again dismiss talk that he’s interested in selling the papers. “My goal is to ensure the West Coast has a viewpoint. That’s why I think the LA Times and the San Diego Union-Tribune will serve as a vehicle for that purpose.”

But he said there has to be a transformation from a newspaper company to a broad-based media company.

Toward that end, he said he’s finally begun to see candidates to replace Norm Pearlstine at the helm of the LA Times. Pearlstine retired in December.

“I’ve just now entered into the phase where the focus has reached my level. I’m in the process of interviewing maybe three or four candidates and we’ll see where that goes,” he said of the paper, which is believed to be losing at least $50 million a year.

“We need to invest, but we need to actually transform into a media organization, rather than a newspaper organization so that digital, video, podcast and everything else goes around it.”

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