Posted on 04/21/2013 7:49:50 AM PDT by blam
Now The Koch Brothers Want To Buy Chicago Tribune, LA Times, Et Al, To 'Make Sure Our Voice Is Heard'
Henry Blodget
April 21,2013
If you can't beat 'em, buy 'em. Billionaire Charles Koch.
The bankrupt Tribune Company has put its bundle of eight huge newspapers on the block.
One of the expected bidders for these papers, Amy Chozick of the New York Times reports, is Koch Industries, the massive energy and manufacturing conglomerate owned by the conservative billionaires David and Charles Koch.
The Kochs may bid for the newspapers, a person who attended a recent seminar held by the Koch brothers in Aspen said, to "make sure that [the libertarian] voice is heard."
The Tribune's newspapers include:
* The Chicago Tribune
* The Los Angeles Times
* The Baltimore Sun
* The Hartford Courant
* The Orlando Sentinel
Buying the papers is expected to cost only about $625 million, which would be a rounding error for the gigantic Koch Industries, which generates a staggering $115 billion of revenue per year.
The focus of the Koch's recent Aspen seminar, Chozick reports, was to put together a 10-year plan for achieving a goal of lower taxes and less regulation.
The seminar produced a three-point plan: educating grass-roots activists influencing politics, and... media
The acquisition of the Tribune papers would obviously go a ways toward supporting the latter tactic.
(Excerpt) Read more at businessinsider.com ...
Regardless of the political slant, the purchase would be a good move. First, Koch Industries knows how to handle unions. They actually have a good relationship with the unions they work with now. Secondly, cost containment would be greatly enhanced by purchasing paper stock from a sister company.
Money follows money, and it takes money to do the things that need getting done. If Soros and the Saudis can do it, the Kochs can do it. Buy it up, boys.
Those short term gains put enough cash on hand to make the company appear sweet for an investor, and the paper was sold with a large cash account. And then the costs started increasing - the leases on properties doubled in five years, printing costs tripled, they paid off a massive bill and fine from the State of California over unpaid sales taxes, and the benefits funds required two big cash injections after a number of financial losses (quite a bit of which was immediate divestiture from investments involving South Africa, selling for pennies on the actual value.)
Then the liberals started selling each other the money pits, and convincing other liberals to dump huge cash injections referred to as loans that had zero chance of ever being paid back. Each time they got a new owner or a new investor, the paper turned around and effectively gave it away to subscribers - $50 or less for a year's subscription - I know I picked up a couple years subscription for $50 a year, and received a $30 supermarket gift card for each year, making my effective cost $20.
Add to all of this a massive change in how the paper worked with advertisers - the bread and butter of the newspaper. For quite a number of national and local accounts, the standard was to effectively sit on the bills for advertising in the first part of the year, get paid off in July, then sit on the bills again and get paid off in December. Instead, the Times started selling that debt to collectors (getting 37 cents on the dollar) and cut off the advertiser. In five months, they turned a receivables debt of 220 million into less than 80 million, and slashed the advertising content in half.
Ad firms turned around and became the banks in the process, prepaying for advertising and then later collecting from clients, using effectively the same system the paper had been using. This further slashed revenue as rather than getting full card rate for the advertising, they were selling it at nearly a 50 percent discount as it was all prepaid. Ad firm revenue skyrocketed, and raising the card rate became next to impossible, as their biggest accounts now were paying cash and more than willing to swap to direct mailing if rates went higher.
And more sales of the money pit to other liberals so they too could lose their shirts. Billions were sunk into the titanic that became Tribune Newspapers and later Tribune Media Group.
And now we're on the latest kick - how to get this white elephant out of the liberal garden, as it is starting to affect campaign contributions. Suddenly, rumors started flying that the Koch brothers were looking at buying the LA Times, and buying it for a premium, as anyone ‘buying’ this sack of debt should be paid large sums of money, not the other way around.
The first numbers bantered around were 3 billion, then 2 billion, then 1.5 billion - it is a virtual auction, trying to lure the Koch family into buying the paper. Now the auction is under 700 million, and that is an easy buy - only under the hood is close to six billion dollars of repairs to reform the newspaper, square away old debt and pensions, restore property ownership and reclaim lost subscribers.
It could actually work. The question is if there's enough left to the Los Angeles Times brand, or if all that money would be better spent in raising another paper to replace it. Or if the best option is just to let it fall into yet another bankruptcy and buy the pieces later.
Honestly, I think that the Koch brothers will do it. The opportunity to go in and fix a dinosaur property, rescuing it from liberals has quite a bit of appeal. They have management that is used to undoing and reforming companies and their idiotic policies that lead to financial death, and restoring companies to profit. And repeating that same formula to recover other liberal media platforms leaves a strong path to growth, a key ingredient in past Koch ventures.
“Our voice or theirs?”
Exactly. What ever happened to the sound advice, ‘trust but verify’?
Who knows what the Kochs actually believe. Conservatives are so hungry for leadership they’re ready to grab on to anyone. That’s how Hitler got elected.
Good idea however the editors would have to take the cure,truth and honesty.
Good start, but good luck getting the dull commies who work there to write what you want. There will have to be a lot of hiring and firing.
I disagree. These papers are for sale because their leftist messaging has both readers and advertisers staying away. I agree that when they take over and change the message the remaining lefties will leave to read other papers; but I suspect a huge conservative/libertarian readership will develop, thus making it profitable. Just my opinion.
Please, please, PLEASE do this! I’ve been begging for some conservatives to buy MSM papers to cover the conservatives side of the news.
Yes, I realize that physical news papers are in the process of becoming obsolete. Even still, having conservative papers today puts the cable news stations on notice when they ignore those stories. Just a few large conservative newspapers can get conservative stories into circulation and picked up by conservative bloggers, forcing the cable TV news to eventually pick up those stories. They can’t ignore them forever.
This is huge and here is hoping these guys can buy a few big name MSM newspapers and vocalize the conservative side against the commie lib propaganda.
PLEASE make this happen. I will be so happy.
I’ve always loved having a paper product in my hands to read. I would subscribe to a physical newspaper if it was conservative. Definitely.
The papers will be sold, but they’ll sell them for $1 to somebody else before they let the Kochs buy them for millions. I’m sure Newsweek would have sold for more than a buck, but they let it go for that to Daily Beast.
Of course, now there is no print Newsweek. Unless the Tribune chain sells to the Koch brothers, they will be out of print withing a few years.
I know at least one of the brothers has spoken out in favor of gay marriage in recent months.
I really don’t have any major issues with them but its a mistake to rely on anyone to speak for us.
they must be buying them for a song, but what good are newspapers that no one reads, anymore? what’s left of the liberal readers will vanish, Conservatives have their own sources for news, digital devices are becoming larger, more portable & easy to read, and there’s no ink to rub off on your clothes/skin. i must be missing something here, because the Koch Brothers are too smart to buy something like buggy whip companies when the automobiles were coming on.
I think your premise is wrong. Advertisers don’t advertise because of politics, they advertise to get noticed by the most people who may be in the market for what they sell.
That is precisely why liberal radio does not do well, they have no listeners. No listeners equal no advertisers.
Some liberal companies do indeed support liberal causes, like giving to lib candidates and PACs, but they first must sell their goods to make the money to give.
If the Koch Boys buy lib newspapers and lib companies quit advertising, GREAT, it won’t be long they will either be out of business or changing their tune.
Whatever the ragheads paid algore they are fastly learning it was too much.
I might actually start reading the Trib again.
Is it too much to hope we finally have some media on our side?…
Their money. Their voice. Seems fair to me. FreeRepublic built on this principle.
Yes.
Good grief, the Kochs are CAPITALISTS. They also happen to be conservative because it makes the most sense in the “real” world.... Just like the Founding Fathers and the rest of us conservatives.
Cool. Get to it.
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