2 reportedly make offer to buy all of Tribune Co.

Bids also welcomed for individual units

November 09, 2006|By James Rainey | James Rainey,Chicago Tribune

LOS ANGELES -- Billionaire philanthropist Eli Broad and prominent investor Ron Burkle submitted a bid yesterday to buy Tribune Co., whose holdings include the Los Angeles Times.

Details about the offer and the price that the pair would be willing to pay remained unclear, but the Los Angeles-based businessmen have said for months that they wanted a local group to take control of the Times.

"Affiliates of the Broad Investment Co. and [Burkle's] Yucaipa Cos. have submitted a competitive bid for acquisition of the entire Tribune company," a source familiar with the offer said.

Broad declined to comment, and Burkle could not be reached.

The offer comes the day after it was revealed that Times Editor Dean Baquet would leave his post, culminating a long-standing dispute between the editor and the paper's Chicago parent over proposed staff reductions.

A month earlier, Times Publisher Jeffrey M. Johnson was forced from his job, also largely related to his defiance of editorial staff cuts proposed by Chicago.

David Geffen, the entertainment mogul who is based in Los Angeles, also has expressed interest in acquiring the Los Angeles Times.

Geffen has talked about buying the paper himself rather than as part of a group but was not known to have submitted an offer as of yesterday.

All three of the Los Angeles magnates have said in the past that the Times would benefit from their stewardship because they would be willing to accept lower profits and invest in news coverage.

Tribune executives have said repeatedly that they preferred to keep the Times in their media conglomerate, which includes 10 other daily newspapers and 25 television stations.

The company opened itself to bids on individual assets only last week, after it received a series of low bids from several private equity firms for the company.

Broad made his fortune in the homebuilding industry and expanded it in the financial services field.

Burkle was one of the top U.S. supermarket operators and now runs Yucaipa, a firm that invests widely for both its principal and public retirement funds.

Local groups and individuals have expressed interest in acquiring other Tribune papers such as The Sun, The Hartford Courant and New York's Newsday.

The leader of a local group that wants to buy The Sun said yesterday's news could increase its chances of getting to bid on the newspaper.

Theodore G. Venetoulis, a publisher and former Baltimore County executive who is leading the Baltimore Media Group in efforts to purchase The Sun, said private owners likely would buy Tribune Co. and then sell some of the individual assets.

"It could lead to the possibility that they would spin off some of the properties to other local owners," he said. "Any movement on the part of Tribune is probably a plus on the opportunity for local ownership. It indicates that there is a willingness to do something with the company."

Venetoulis, along with 15 other business and civic leaders, inquired two weeks ago about Tribune's interest in selling The Sun.

Under pressure from shareholders because of its sagging share price, Tribune said in late September that it would consider a sale or breakup of the company.

A deadline for nonbinding preliminary offers resulted in bids valued at about the company's current share price, two people familiar with the process said. That led Tribune's investment bankers to begin calling people who had expressed interest in bidding for particular assets to say such offers were welcome.

Tribune faces the challenges confronting many media companies. The circulation of its newspapers has been sliding, and many advertisers have been shifting their spending to the Internet.

Newspaper Web sites have recorded strong growth. But online advertisements sell for considerably less than print ads and provide only about 5 percent of newspaper companies' total revenue.

The Times reported last week that its weekday circulation in the six months that ended Sept. 30 was down 8 percent from the corresponding period last year. The Sun's weekday circulation for that period was 236,172, down 4.5 percent.

James Rainey writes for the Chicago Tribune. Sun reporter Andrea K. Walker contributed to this article.

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