Photo by from a Bloomberg broadcast
Will the sixth turnover finally turn out to be a charm?
That's the question of the hour as yet another would-be master of the San Diego Union-Tribune surfaces in the form of Gannett Co., owner of USA Today and a host of other dailies.
America’s largest newspaper publisher is making an all-cash, $425 million offer to snap up Chicago-based Tribune Publishing, the U-T’s current proprietor.
The proposed change of control, which would also entail assumption of $390 million in debt, was initially spurned by Tribune chairman Michael Ferro, leading to Monday morning's public offer, Gannett said.
“We believe Gannett is uniquely willing and able to propel Tribune into the position of strength that will allow its beloved and historic publications and other assets to survive and thrive in this challenging environment," Gannett president Bob Dickey said in a letter to Ferro.
"By combining, we would create a company with the financial stability and flexibility equipped to preserve journalistic integrity, high standards and excellence for years to come."
Tribune chief executive Justin Dearborn, appointed to the job after Ferro grabbed control of the chain and ousted former CEO Jack Griffin two months ago, replied, "The Board is thoroughly evaluating the proposal in consultation with our independent financial and legal advisors, and will respond to Gannett promptly. The Company is committed to acting in the best interests of shareholders.”
Ferro, who bought 5.22 million Tribune Publishing shares in February at $8.51 each, giving him a 16.5 percent stake in the company, would turn a reported personal profit of $19.5 million on Gannett's current offer.
But in turn, he would surrender his position as a powerful Midwest media magnate and recipient of free Oscar tickets, courtesy of the Tribune-owned Los Angeles Times.
"By all accounts, Ferro has grown to relish the spotlight of fame that media ownership brings — as long as he is the one controlling it,” according to an October 2013 profile in Chicago Magazine.
"He has rubbed elbows with actor Jim Belushi, rapper Lupe Fiasco (who calls him ‘a genius’), and former Playboy centerfold Jenny McCarthy, all of whom he has persuaded to write a rotating column."
Meanwhile in San Diego, the prospective change of command could impact everything from the fortunes of mega-millionaire Chargers owner Dean Spanos to the number of additional layoffs at the long-struggling Union-Tribune.
During the Ferro era, the U-T ‘s front page has been pumping hard for Spanos's $1.8 billion downtown football stadium, to be financed by a hefty increase in the city's levy on hotel stays, with the ultimate backing of local taxpayers.
Sunday's U-T banner headline, "HIGH VOLTAGE," was accompanied by a photo of Spanos with Chargers star LaDainian Tomlinson and NFL commissioner Roger Goodell over a glowing piece by the paper's sports columnist Kevin Acee.
"LaDainian Tomlinson talked about Junior Seau, one Chargers legend evoking the memory of an even bigger Chargers legend as part of the kickoff event for the effort that will shape Chargers history," began Acee, describing a rally by the team to gin up public enthusiasm for an initiative campaign that has drawn fire from the city's political and financial establishments.
“If Junior was here, you know where he would be,” Tomlinson was quoted as saying. “He would be sitting right here. In fact, he probably would go to each door in this community to get those votes.”
There was no mention of Seau’s 2012 suicide and the 2013 revelation that the legendary linebacker suffered from chronic traumatic encephalopathy, a degenerative disease attributed to repeated hits to the head.
Three congressmen friendly to the proposed Spanos subsidy also received prominent play.
"Before symbolically motioning toward neighboring Petco Park, [Scott] Peters (D-San Diego) told the crowd, ‘Don’t let them tell you we can’t do something great.”
Juan Vargas collected a total of $667,000 in campaign funds from banking and insurance interests.
Added the story, "And Rep. Juan Vargas (D-San Diego) specifically called out San Diego Mayor Kevin Faulconer, who has yet to officially opine on the Chargers’ proposal and did not attend Saturday’s event. ’Mayor, get off your duff,’ Vargas said. ‘Let’s go.’ To that, the crowd cheered."
Tribune chairman Ferro is no stranger to the nation’s big-money professional sports establishment, including Chicago insurance mogul Pat Ryan, Sr., who placed 279th on the latest Forbes list of the 400 richest Americans, with a net worth of $2.4 billion.
Andrew J. McKenna
Ryan owns a reported 20 percent of the NFL's Chicago Bears with ex-McDonald's chairman Andrew McKenna Sr., a reported financial backer of Ferro's 2013 takeover of the Chicago Sun-Times.
McKenna, who is on the board of the Bears with Ryan, is also a board member of Merrick Ventures, LLC, the vehicle through which Ferro assumed control of Tribune Publishing, according to Bloomberg.com.
Additionally, in August 2007, the Chicago Tribune reported that Ferro, McKenna, and Ryan were among a group of investors then seeking to acquire baseball's Chicago Cubs.
Whether a Gannett takeover would alter the U-T’s treatment of the Chargers stadium bid or other of San Diego’s highly charged political issues is a matter of inside speculation.
Editor Jeff Light — who got his job after La Jolla's David Copley unloaded the U-T to Tom Gores and his Beverly Hills–based Platinum Equity in 2009 — has hung on through two subsequent owners, Douglas Manchester in 2011 and Tribune Publishing in 2015.
In addition, Light has survived Tribune's infamous in-house tumult, including last fall's firing of Democratic publisher Austin Beutner and Ferro's takeover of the company earlier this year.
Noted for his political fealty to the paper's succession of changing ownerships, Light might keep his job, though Gannett, with over 100 papers, has deep management ranks of its own.
But with or without Light, can Gannett turn its faltering business around without more layoffs here? The company's recent history suggests tougher times may lie ahead.
"Total revenue was down 9.7 percent compared to the same period in 2014, and net income was $20.4 million, a profit margin of 2.6 percent — low by Gannett standards," according to a Poynter.org account of the company's most recent financial report.
"While accounting and tax considerations were responsible for some of the decline, the company projects advertising revenues will fall another 5 to 7 percent and circulation revenue 2 to 4 percent in 2016."
Adds Poynter, "The company claims more than 100 million unique visitors a month. Digital-only paid subscriptions have risen to 125,000, but that still is only about a tenth as many as the New York Times has. Print circulation volume is off about 8 percent both daily and Sunday."