Baltimore group seeks to buy Sun

Venetoulis, Embry, Sondheim join bid

October 27, 2006|By Jamie Smith Hopkins and Andrea Walker | Jamie Smith Hopkins and Andrea Walker,sun reporters

A group of prominent Baltimore business and civic leaders has launched an effort to buy The Baltimore Sun Co., sending a letter yesterday indicating its interest to the company's Chicago parent.

Theodore G. Venetoulis, a former Baltimore County executive who lost a Democratic primary bid for governor in 1978, said he wrote Tribune Co. yesterday afternoon on behalf of the newly formed Baltimore Media Group. His letter expresses "strong interest" in acquiring The Sun and other assets held by The Baltimore Sun Co.

Venetoulis chairs the group, which includes Abell Foundation President Robert C. Embry Jr. and longtime civic leader Walter Sondheim. He declined to name the other participants but said that 15 to 20 "very successful" Baltimoreans have expressed interest, depending on the price, and "there will be more before it's over."

The Baltimore residents are the latest in a string of wealthy business people around the country who want to buy their local metro daily newspapers from embattled corporate parents.

Locals led by Jack Welch, the former head of General Electric Co., said this week that they were interested in buying The Boston Globe. A group led by public relations and advertising executive Brian Tierney recently paid $515 million for The Philadelphia Inquirer and Philadelphia Daily News.

In Los Angeles, three billionaires, including music executive David Geffen, have said they want to buy the Los Angeles Times, which also is owned by Tribune. Yusef Jackson, the son of Rev. Jesse L. Jackson, said he wants to buy the troubled Chicago Sun-Times.

"Communities are really getting very concerned about corporate cutbacks," said Thomas Kunkel, dean of the Philip Merrill College of Journalism at the University of Maryland.

Even for all their struggles with declining circulation and flat advertising, many metro daily newspapers still have profit margins of 15 percent or more - one reason why a number of major private-equity firms reportedly are interested in all of Tribune.

Tribune, which owns The Sun, 10 other daily English-language newspapers, two dozen television stations and the Chicago Cubs baseball team, said last month that it might sell all or some of its assets. A company spokesman, declining to comment yesterday, would not say whether Tribune had received the Baltimore group's letter.

Venetoulis, who said he has spoken to investment bankers hired by Tribune, said he believes the group has the wherewithal to make a serious bid. It has received interest from several large banks about financing, he said.

Participants see the potential acquisition as a social as well as a business investment, Venetoulis said.

"The group we've put together understand two things," said Venetoulis, who has worked in the publishing business for 25 years and once owned the Towson Times. "One, that ... this will not be an investment that will provide the usual yield and return that some investors will be used to. ... Secondly, they've agreed that they would not in any way attempt to jeopardize the paper's independence or attempt to give it a certain ideological bent."

Edwin F. Hale Sr., chief executive of Baltimore-based First Mariner Bank, said in an interview this month - when rumors were swirling about Venetoulis' effort - that he told organizers that he'd gladly listen when a proposal was on the table.

"I think they've talked to most of the corporate people around town," Hale said. "They're very serious."

Venetoulis said he wanted to get the letter in before today, which he had heard was the deadline for investors interested in buying the Tribune Co. as a whole. If Tribune decides to sell the entire company, Venetoulis said the group would try to negotiate with that buyer instead.

Embry and Sondheim approached Venetoulis nearly four months ago to mount the effort, as it became clear that Tribune - battered by intensifying media competition, stagnant revenue and the demands of its largest investors - might be open to offers. Around the same time, Embry told The Sun that the Abell Foundation was interested in joining with others for such an effort.

The founders of the Abell Foundation long owned The Baltimore Sun Co., selling it to Times Mirror Co. in 1986. Times Mirror sold itself to Tribune in 2000.

"If The Sun is going to be sold, ... I think that it would be great if it was owned by people who want to maintain and restore its quality," Embry said yesterday. "And I think that the media in the United States should not be centralized in large, publicly traded companies but should be decentralized, and have different voices. Baltimore ought to have its own voice."

But private ownership isn't necessarily a panacea. The Philadelphia papers' new owners are looking at more layoffs and merging the publications to make up for sluggish sales and advertising.

Venetoulis said his group sees that as a warning against buying at any cost. He thinks Tierney might have overpaid.

John Morton, a newspaper industry analyst in Silver Spring, wouldn't be surprised if Tribune ends up selling some pieces of the company, but he doubts a major metro daily such as The Sun would be among them. "If they got an offer they couldn't refuse, they might be willing," he added.

Sun Publisher Rondra J. "Ronnie" Matthews referred questions to Tribune, whose spokesman, Gary Weitman, would not comment.

Sun reporter Tricia Bishop contributed to this article.

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