The Carpathia

The first time I worked for a newspaper that was sold, I arrived at the old Times-Advocate of Escondido about the same time the Tribune Co. was consolidating its hold over its new property. If there were any profound changes brought on by the new owners, I really didn't notice.

More than a decade later, I lived through another change of ownership when A.H. Belo (The Dallas Morning News) bought the family-owned Press-Enterprise of Riverside. Belo brought in a new executive editor, two-time Pulitzer Prize winner George Rodrique (who I still think is the best executive I've ever worked for), but I left the company for greener pastures before the really profound changes took place.

Today, the newspaper I've been working for the past nine years - The San Diego Union-Tribune - announced it has agreed to sell to Platinum Equity of Beverly Hills for an undisclosed price (which The Wall Street Journal quotes a source as saying is south of $50 million). As stated in an earlier blog post, David Black of Canadian-based Black Press is a partner in the deal, though his exact role has not been disclosed and remains the topic of abundant conjecture.

Relief, anxiety, concern and anticipation are but a few words that describe not only my feelings, but the feelings of most of the people I know. Will the paycuts and furloughs announced just two months ago continue under the new leadership? Who knows (my guess is, `No Duh'). Will the promised layoffs that have yet to materialize, in fact, come to pass? Who knows. (Again, my guess is a big `No Duh') Will the new owners bring a clearer sense of vision to Mission Valley? Everyone I talk to responds with an unequivocal yes. But whether that's good or bad remains to be seen and depends on whom you talk to.

How are others seeing this deal? With interest. The Journal reported "the paper generated about $100 million in cash flow in 2004, according to people familiar with the paper's finances, meaning the Union-Tribune could have been worth close to $1 billion based on valuations at the time. Now, the paper is close to break even, these people say, as it has been battered by the collapse of newspaper classifieds."

The Depression, er, recession, hasn't helped, either.

So what do we know about Platinum Equity? If you recall the earlier post, they have a really cool Web site. And they're headed by a really, really rich guy, Israeli native Tom Gores, whom Forbes says is worth a cool $2.5 billion - the 163rd richest American (but who's counting?).

Platinum also has made a nice living for its investors through buying distressed properties, fixing them up, and selling them at a profit. After cutting costs.

If you have a few million dollars, or more, to invest, you might want to bank it with Platinum. The New Mexico Educational Retirement Board invested $30 million of its portfolio with the private equity firm last year.

"They don't look necessarily at fundamentally broken companies, but at companies where there are one or more operational issues that are preventing a company from realizing its true potential from financial and operational perspectives," according to minutes of a January, 2008, meeting. One investment expert was "impressed with the discipline of the group in terms of what they will purchase and where they will focus."

Harold Fuson Jr., executive vice-president for Copley Press, Inc., said in a statement released this morning that Platinum emerged "as the bidder best equipped to ensure that the Union-Tribune - which last changed owners in 1928 - maintains its position as one of San Diego's leading community institutions."

The Titanic may be sinking, but the Carpathia may well be on its way. Let's hope it isn't four hours late this time.