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The Chicago Sun-Times, that city's second largest newspaper with daily and Sunday circulation of around 400,000, has been sold for a bit above $20 million. The deal include a string of Chicago area daily and weekly newspapers and more than 40 websites. (Copley Newspapers several years ago sold a group of Chicago area papers to the Sun-Times.) The Sun-Times went through bankruptcy in 2009 -- common among metro dailies -- and now has annual losses exceeding revenue. In 2009, an investor group had purchased it for $5 million plus assumption of $20 million in debt. The new management promises to concentrate on digital operations. Still, some in the industry wonder why the buyers paid even $20 million. This sale once again raises a local question: did Papa Doug Manchester really pay $110 million for the Union-Tribune, permitting Platinum Equity to double its investment?

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Comments

Visduh Dec. 22, 2011 @ 10:38 a.m.

From a purely financial standpoint, if the enterprise is losing money it is worth nothing, unless there is some salvage value present. Your question about what Manchester actually paid for the SD rag, or if he paid anything at all for it, is a good one, and one that most local folks would like answered. It may have value, perhaps short-lived, as a platform for his propaganda masquerading as news and/or carefully-wrought opinion.

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Don Bauder Dec. 22, 2011 @ 1:44 p.m.

But if Manchester were buying it as a short-term propaganda organ, why in the world would he pay $110 million? Keep in mind several things: 1. Platinum Equity raises money from various investors, including, unfortunately, pension funds. So it wants to be able to tell them that it turns over the assets it buys cheap at a fat profit. Trouble is, how do we know? Platinum had a motivation for insisting that Manchester state publicly that he paid a stiff price. 2. Manchester (as he claims in the marriage dispute with his estranged spouse) has had some rough financial times. (His wife says the opposite.) But it is a matter of public record that some of his big investments have gone sour. 3. Do we know that Manchester is the only buyer of the U-T? Is he part of a syndicate of investors whose identity and perhaps even existence have not been revealed? Best, Don Bauder

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Visduh Dec. 22, 2011 @ 2:46 p.m.

Again you pose questions that we'd all like to have answered. I still think that this deal made sense as a real estate investment, and that the paper was just dragged along in the deal. But on the other hand, the paper could have been a tool of obfuscation to muddy the waters involving the real estate.

I could really use some background on his marriage. Haven't they been married for almost 50 years? And weren't they the poster couple around town for domestic tranquility for almost that long? What caused the rupture? Does anybody know? There must be rumors. The whole thing seems out of place.

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Don Bauder Dec. 22, 2011 @ 8:40 p.m.

Manchester may plan to keep the Mission Valley plant going until the ink and paper edition runs out of gas, then continue to online operation in another building and tear down the MV plant. He may think that commercial real estate will have recovered by then. He may be disappointed. But that building is in a juicy location. I still don't think he paid $110 million, and Platinum would have been happy to sell the U-T for far less than that. And may have done so.

As to Manchester's personal life: yes, there are rumors, revolving around a hotel that he owned, and an occupant thereof. I heard it years ago. There were other rumors, too. Best, Don Bauder

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SurfPuppy619 Dec. 22, 2011 @ 8:18 p.m.

This sale once again raises a local question: did Papa Doug Manchester really pay $110 million for the Union-Tribune, permitting Platinum Equity to double its investment? == If he paid $110 million for the UT-why didn't he buy it 3 years ago for $50 Million instead of Gores????

I don't buy the $110M. In fact if he paid $50M he still paid too much.

The ONLY UT value is the real estate, and it is substantial once the market turns, but that is not going to happen for 5-10 years, maybe longer- Machester won't even be alive when the market turns.......................

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Don Bauder Dec. 22, 2011 @ 8:43 p.m.

I agree that the commercial real estate market -- in San Diego and most of the U.S. -- could take several years to turn around. That is especially true of hotels, which are Manchester's specialty. Best, Don Bauder

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Burwell Dec. 22, 2011 @ 9:56 p.m.

Papa Doug split the U-T into two pieces, as reported in the media. A separate LLC was formed to purchase the land and building, and a second LLC was formed to purchase the paper. The paper will have to pay rent to the other LLC to use the building. Dougo will probably suck the rent money out of the U-T and use it to pay the acquisition loan. Other media sources have reported that the land and building were appraised at $45 million by the county assessor, which is probably pretty close to the actual purchase price of the land and building alone. Dougo and Platinum would have to negotiate the allocation of the purchase price. I assume Dougo borrowed most of the purchase price. How he allocated the acquisition debt between the paper and the land is the real question. If all the debt went against the land and none against the paper, Dougo could shut the paper down in a heart beat without engaging in complex negotiations with his lenders.

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Don Bauder Dec. 23, 2011 @ 10:01 a.m.

I think it's generally assumed that the deal was done with debt. You can make that assumption on most commercial real estate transactions. I would certainly think that Manchester made financial arrangements permitting him to shut the paper down quickly. Look how quickly Platinum got out. Its usual holding period is 3 to 5 years. It bailed out of the U-T at around 2.5 years. It may have come to believe that metro dailies are dinosaurs. Many share that view. Best, Don Bauder

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Twister Dec. 27, 2011 @ 6:46 a.m.

Most metro-dailies ARE dinosaurs--well dodo birds anyway, but it is not entirely the fault of the Internet. Advertising is undergoing its own transformation; as the word gets around, their little playlets are increasingly ridiculed. The primary defect of dailies, and, for that matter, most journalism, is that they don't follow up on stories. The times they are a-changing--for the better in some respects. Too bad the dailies can't see it coming. To be eclipsed by a bunch of Twits? OMG!

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Don Bauder Dec. 27, 2011 @ 11:42 a.m.

On the other hand, there are some very intelligent websites, and they are not run by media companies. Best, Don Bauder

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Ponzi Dec. 27, 2011 @ 12:31 p.m.

The phenomenon known as Craigslist is a major reason the dailies are dying. Once classified advertising became free, the local advertising monopolies were toppled.

On another note, I would believe the Chicago Sun would be worth far more than the San Diego U-T. There must be some misinformation in the price Manchester paid for the SDUT, some financial shenanigans, or a fool with his money.

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Don Bauder Dec. 28, 2011 @ 11:49 a.m.

Yes, I believe there was some misinformation in the price Manchester CLAIMED he paid for the U-T. There was no reason to pay $110 million, as he claimed he did -- permitting Platinum Equity to almost triple or more than double its money. There is something else in there -- such as, possibly, Manchester announcing a $110 million figure to help Platinum as it raises money with new investors. Best, Don Bauder

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