Tribune Publishing, the spun-off print stepchild of the once-mighty Chicago Tribune and Los Angeles Times media empire, is facing yet another fork in the road.
Last week was filled with news about the company's 7 percent workforce cut by buyout.
Now comes word that the firm's biggest percentage owner, Oaktree Capital Management, is preparing to unload its stock in the downward-heading enterprise.
As reported here last month, Oaktree is run by Bruce Karsh, a onetime associate of Eli Broad, the L.A. billionaire Democrat said to be interested in seizing control of Tribune-owned Los Angeles Times and the San Diego Union-Tribune.
Newspaper-industry watcher Ken Doctor has predicted that Broad could make another offer before the end of the year, suddenly a seemingly distinct possibility with Tribune's latest move on Friday the 13th.
"We are party to a registration rights agreement that is currently in effect with respect to investment funds affiliated with Oaktree Capital Management, L.P. and entities affiliated with JPMorgan Chase Bank, N.A., who we refer to in this section collectively as the 'eligible investors,'" says a so-called shelf registration statement filed late November 13 with the Securities and Exchange Commission.
"Under this agreement, we are required to use reasonable best efforts to effect the registration under the Securities Act of our common stock as requested by the holders of our securities that are a party to the agreement, at our expense."
According to the statement, as of November 9, Oaktree and affiliates owned 4,695,947 shares of the company, or 17.9 percent.
"After the completion of this offering the selling stockholder will hold less than one percent of our common stock assuming that the selling stockholder resells all of its common shares subject to resale pursuant to this prospectus," the filing says.
The document goes on to describe an array of exotic methods Oaktree may employ to dispose of its equity, raising the level of intrigue surrounding the troubled newspapers higher than ever.
"The selling stockholder may enter into derivative, sale or forward sale transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions," the filing says.
"Additionally, the selling stockholder may engage in hedging transactions with broker-dealers in connection with distributions of shares or otherwise. In those transactions, broker-dealers may engage in short sales of shares in the course of hedging the positions they assume with the selling stockholder."
The disclosure says that Oaktree can sell its shares "directly to one or more other purchasers in negotiated sales or competitively bid transactions."
Adds the filing, "Further, we cannot assure you that the selling stockholder will not transfer shares of its common stock by other means not described in this prospectus.”
All of which leaves readers, employees, and politicos still scratching their heads about the ultimate destiny of the newspapers.
Some are rooting for Broad and friends to ante up for the papers, reasoning that he could use his deep pockets to subsidize them, albeit at the price of their political independence.
Others, including teachers and their unions, worry that a Broad takeover might unfairly influence public debate on the future of charter schools and other so-called public education reform measures he favors.