L.A. Billionaires Join in Bidding For Tribune Co.
By SARAH ELLISON, RHONDA L. RUNDLE and BRIAN STEINBERG
Staff Reporters of THE WALL STREET JOURNAL
November 9, 2006 12:04 a.m.; Page B1
Los Angeles billionaires Eli Broad and Ronald Burkle, once thought to be interested only in buying the Los Angeles Times, have joined forces to make a preliminary bid for the paper's parent, Tribune Co., heating up the competition for its stable of newspapers and television stations.
Mr. Broad, whose wealth comes from home building and insurance, and Mr. Burkle, an investor who made his fortune in supermarkets, join several private-equity groups that submitted preliminary offers last week. Messrs. Burkle and Broad are thought to be primarily interested in the Los Angeles Times, Tribune's biggest newspaper and one that is thought to be worth at least $2 billion. Bidding for the entire company, while likely costing four times as much, may give them an edge over rivals also interested in the paper, such as entertainment mogul David Geffen.
News of the preliminary bid added to an unfolding drama at the Los Angeles Times, which is becoming a symbol of the turmoil gripping the newspaper industry. Falling circulation and ad revenue and stinging competition from the Internet are putting pressure on publishers to take dramatic action, including job cuts or bigger corporate restructurings. The Broad-Burkle bid for Tribune came the day after the Times's editor, Dean Baquet, quit after refusing to make job cuts demanded by Tribune management.
While the staff of the Los Angeles Times generally supports the idea of local ownership of the paper, they have no role in the sale process. Mr. Geffen hasn't been in contact with Mr. Baquet, but has had some casual conversations with at least one top editor at the paper, according to people familiar with the matter.
The bid came the same day that the editor of the Philadelphia Inquirer, a newspaper bought by private local owners earlier this year, resigned amid continuing financial pressure. (Also, Morgan Stanley continued to pressure New York Times Co. to abolish a stock structure that leaves the paper in control of the Sulzberger family; see article2.)
Tribune, under pressure from its largest shareholder, the Chandler family, said in September that it would explore options, including a sale of the entire company. Tribune owns 11 newspapers, including the Los Angeles Times and the Chicago Tribune, as well as 25 TV stations and the Chicago Cubs.