Jeff Smith noon, March 8
Did Platinum Pay $30 Million for U-T, or $52 Million?
Tom Gores, head of Beverly Hills-based Platinum Equity, owner of the Union-Tribune since 2009, is getting plenty of press attention now that he appears to be in the running -- maybe at the front of the line -- to buy the Detroit Pistons of the National Basketball Association. Crain's Detroit Business quotes Gores saying that the U-T purchase has "been better than expected, maybe much better." Crain's reports that Platinum paid "a reported $30 million" for the U-T. That's interesting, because it has always been assumed that Platinum paid $52 million, which was half the value of the real estate. I assume the $52 million is correct, because Matt Potter at the time added up the value of real estate transactions to get that figure. Crain's also refers to private equity group's "buy-fix-operate-sell" strategy. It has always been assumed that Platinum intended to dump the U-T at some point. In the interview, Gores refers to "the relatively short horizon of a private equity owner, typically five years." That, roughly, is Platinum's normal holding period. Thanks to Matt Potter for sending along the Crain's interview.