1:30 p.m., July 30
U-T Was "a Bit Fat," but Low-Priced, Says Gores
Tom Gores, head of Beverly Hills-based Platinum Equity, the private equity group that bought the Union-Tribune last year, says this month in a question-and-answer session on the company's website that the U-T in certain areas "was a bit fat, so we've made the paper more efficient in terms of head count." (There have been massive layoffs under Platinum, as there had been earlier under Copley management.) "We were able to buy it at a reasonable value," says Gores. (I have said all along that Platinum paid $52 million for roughly $100 million worth of real estate; the newspaper came with the deal. However, a terrible commercial real estate market has frustrated the firm's ability to dump the assets.)
Gores's statements in the Q and A are basically the same he gave the magazine Mergers & Acquisitions last April. In that interview, Gores was critical of prior Copley management, saying it had not addressed fixed costs that were "pretty high...We knew that advertising revenues were falling, but we saw an opportunity to attack the fixed costs and adjust the company to survive on a realistic assessment of both advertising and subscription revenue." He told Mergers & Acquisitions, "We put in new management and got the fundamentals in order...We could make a difference operationally in a way the old owners hadn't tried." In that interview, he said that one challenge is to get readers to pay for online content. But in all likelihood, it will be a bigger media company that will figure out how to do that. In that interview, he also mentioned that Platinum got the U-T "at a fair price." In both the online and Mergers & Acquisitions interview, he refers to the U-T as "the Tribune," but in the M&A interview he also calls it by its correct name.
Thanks to Matt Potter for providing the Mergers & Acquisitions interview.