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* Ken Doctor…
Gannett’s long quest to buy the newspaper company known as Tronc is nearing the finish line.
Confidential sources have told POLITICO that asset purchase agreement drafts have been exchanged by Gannett, the country’s second-largest newspaper chain and publisher of USA Today, and Tronc, formerly known as Tribune Publishing and the publisher of such broadsheet mainstays as The Los Angeles Times, The Chicago Tribune and The Baltimore Sun. The announcement of a deal could come as soon as business opens on the fourth quarter of the year, as early as Monday morning. […]
While the public had become well aware of Ferro’s aversion to selling, it hadn’t realized other complications of the deal. Financing looks like it is now in place for Gannett, with Jefferies LLC, a large American global investment bank, in place, financial sources said. As I reported earlier, Gannett had run into financing issues with large banks, including JP Morgan, growing wary of a deal. There were two main factors to their hesitation: First, the increasingly high price of the acquisition makes its financial justification tougher to certify, with Gannett’s leverage ratios apparently one question. Secondly, the further cratering of print advertising and sluggishness of digital advertising complicate further assessment of forward value.
Investors generally have shared the concern that Gannett could be overreaching in what would be its third significant acquisition since the newspaper operations split from old Gannett (newspapers and broadcast stations, now assembled as TEGNA) two years ago. As the stock market has hit new highs, Gannett has seen a drop of 40 percent in share price since it began its quest for Tribune/Tronc.
For its part, Gannett has remained bullish on the deal, believing it can wring large cost-saving synergies by combining many operations.
* Putting the purchase into some context…
When Gannett’s purchase of Tronc becomes official, Gannett will own the #3, #4, #10, #20, and #23 newspapers in the country. pic.twitter.com/pm0ChsxCh4
— Joshua Benton (@jbenton) October 3, 2016
posted by Rich Miller
Monday, Oct 3, 16 @ 10:41 am
Sorry, comments are closed at this time.
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Waitin’to see if investors will close Sun-Times as rumored
Comment by Annon' Monday, Oct 3, 16 @ 10:52 am
Rich,
I’m not in media, so forgive me if this is a dumb question. Is this a good idea to have so much of the media ownership concentrated in the hands of such a small number of people/entities?
Comment by Delimma Monday, Oct 3, 16 @ 10:52 am
– the newspaper company known as Tronc –
In case there was any doubt that you created a ridiculous name for your brand…
…. when it has to be explained that it’s the name of a newspaper company, and not a Godzilla opponent, you have.
Comment by wordslinger Monday, Oct 3, 16 @ 10:54 am
I hope there will be a new editorial board–it might convince my spouse and I to continue our subscription. Been reading it since the early 60’s. My Mom used to claim I learned to read using the Tribune.
Comment by Groundhog Day Monday, Oct 3, 16 @ 11:02 am
==Is this a good idea to have so much of the media ownership concentrated in the hands of such a small number of people/entities?==
Why do YOU think?
http://explorersfoundation.org/glyphery/223.html
Comment by TinyDancer(FKASue) Monday, Oct 3, 16 @ 11:10 am
Gannet’s newspapers have all weighed in and either trashed Trump, or endorsed Hillary. Once the deal is done, I hope Gannet comes in and fires the entire trip editorial board, and ultimately finishes what Rod started (snark:)!
Comment by Anon Monday, Oct 3, 16 @ 11:13 am
*Trib
Comment by Anon Monday, Oct 3, 16 @ 11:14 am
Dear Message Board,
The *phone company* was broken up in the early 80’s because it was a regulated monopoly. Originally long distance was separated from local service (and equipment, too). The local service was broken up into 7 smaller Baby Bells. These have since been allowed to merge.
So I have no problem with monopolies being regulated by the Government. Its far superior than what we have now where businesses can outspend the individual to get laws that only enrich themselves.
So I think its terrible that the media is consolidating.
Thanx for letting me post,
Jack T
Comment by Jack Traviono Monday, Oct 3, 16 @ 11:15 am
Are they going to fire the two morons from the Tronc video? Please don’t let those people loose on the news….
Comment by archpundit Monday, Oct 3, 16 @ 11:37 am
===Please don’t let those people loose on the news….===
Lol Archpundit, they don’t consider it “news,” they think of it as content. Tronc is (was) in the content business, not the news business.
To me, that explains the downward trajectory of newspapers as much as anything else. The business model became a contest to see which platform could keep the most eyeballs on the page and for how long. That’s when journalism began its downward slide, once it was no longer responsible for “keeping eyes on the page.”
Sigh.
Comment by 47th Ward Monday, Oct 3, 16 @ 12:32 pm
Jack T
The print media is consolidating to survive. Competition from other media and the internet have destroyed their business model. There is too much competition to worry about monopolies.
Comment by Last Bull Moose Monday, Oct 3, 16 @ 12:32 pm
@last bull:
~ with respect ~
I beg to differ. Not sure where the other competition is. There are different methods of consuming media today. But those are monopolies as well.
Have a good day,
Jack
Comment by Jack Traviono Monday, Oct 3, 16 @ 12:39 pm
I hope the first thing Gannett does is fire Kass.
Comment by Cheryl44 Monday, Oct 3, 16 @ 12:46 pm
Going to be a bloodbath at these papers. The first thing the Gannett bean counters will do will be to look at the staff list and ask themselves, “Why do we have all of these editorial writers and deputy assistant metro editors?” The Tribune editorial board is about to find out what true management efficiency and elimination of waste looks like. Some of them will either be begging John Tillman for a job or find themselves covering North Shore Mosquito Abatement Board meetings. The Tribune’s readers have plenty of opinions the paper can publish for free.
Comment by Martin Funkhouser Monday, Oct 3, 16 @ 1:13 pm
Jack T.
Reasonable people can differ on the strength of monopolies in an industry.
Think about how you would get information on a product 30 years ago versus today. I remember reading car ads and comparing features and prices. Now I go to the web and access dealer sites and comparative reviews. The newspaper is no longer the first source for most of the advertising information.
The old model was to sell the readers to the advertisers and to sell the readers both news and useful advertisements. That model is not working as well today.
I’m not sure how we fund the gathering and vetting of news going forward. The internet seems to gather a lot of surface information, but with little or no vetting.
I can see how one group doing all the vetting and structuring of the news is a problem. I don’t think we are there yet. But it is something to watch.
Also, with respect.
Comment by Last Bull Moose Monday, Oct 3, 16 @ 1:47 pm
===Lol Archpundit, they don’t consider it “news,” they think of it as content. Tronc is (was) in the content business, not the news business.
Cat videos for everyone!
Comment by archpundit Monday, Oct 3, 16 @ 2:07 pm
Wikipedia is now considered a reliable journalistic source. Interesting.
Comment by Brendan Monday, Oct 3, 16 @ 2:15 pm
@Annon’
The Sun-Times has a higher circulation than the Tribune. It might get sold again, won’t be folding anytime soon.
Comment by Brendan Monday, Oct 3, 16 @ 2:21 pm
===The Sun-Times has a higher circulation than the Tribune===
I think those numbers come from before the CS-T sold its suburban papers to tronc.
Comment by Rich Miller Monday, Oct 3, 16 @ 2:23 pm
Nobody is discussing the potential effect on the Sun-Times. Maybe it won’t have any, but before the S-T added the USA Today content, it was becoming a terribly thin read (I could take the midweek edition and fold it to fit in my front pocket). I don’t know if Gannett would pull/not-renew or not, just know the S-T is a much better paper with the extra content.
Comment by lake county democrat Monday, Oct 3, 16 @ 2:28 pm
–Nobody is discussing the potential effect on the Sun-Times.–
They gone.
Over the years, the Sun-Times has been more resilient than Rasputin. But there’s no revenue for the Sun-Times: you don’t see it on the pages, except the happy-ending neighborhood massage places back by the daily racing form in Sports.
Ferro, owner of the Sun-Times, sold the cash-cow suburban papers to the Trib, then bought the Trib.
Are you kidding me? How is that not fraud?
Where’s the capital to keep the Sun-Times going, unless a Pritzker or Eychaner steps up and is willing to lose a lot of money?
As for as the Tribbies…. there was some bad-faith going on there when Zell bought them.
The talk in the Wise Guy Corner at the Goat from Tribbies was that Fitz and the board didn’t even entertain better offers.
They let Zell rob their employees’ ESOP to take it private. And then board members who signed off on it got mucho bonusta — $180 million– down the line.
Zell leveraged about $300 million in cash for an $8.2 billion buy. Zell almost got made whole, and the workers’ ESOP got pennies on the dollar, after bankruptcy.
Where was the Justice Department on that obvious scam?
Maybe Big Brain Bruce, Kass and Katrina can lecture on the freedom and liberty of the unregulated marketplace in this case study.
http://articles.chicagotribune.com/2013-01-13/business/ct-biz-trib-series-1-20130113_1_sam-zell-randy-michaels-big-gamble/5
Comment by wordslinger Monday, Oct 3, 16 @ 3:38 pm