This could get very ugly, very fast. The Koch brothers are reportedly considering a bid for the Tribune Company newspapers — focusing on the crown jewels of the L.A. Times and Chicago Tribune, or at least what jewels of power are left in the flailing newspaper industry — but they may face stiff competition in the form of a debt-free, full pocketed media power player named Rupert Murdoch.
L.A. Weekly's Hillel Aron reports "multiple sources" claiming Charles and David Koch will offer to buy the Tribune Co. slate of papers — including the Times, the Trib, the Baltimore Sun, and five other papers — or maybe just offer to buy all of Tribune Co. outright. If the notoriously free-spending political heavyweights and brothers in industry choose to go for the whole company — and, importantly, if their offer is taken seriously and ends up bailing out the papers — their purchase would also include 20 television stations along with the eight papers. The Tribune Co. emerged from bankruptcy at the end of 2012 and has been looking to unload their newspaper holdings, apparently as part of a single-package deal, according to Bloomberg's Edmund Lee. Any buyer interested in Tribune's Co.'s newspapers will have to cough up a cool $600 million to acquire the whole lot — not exactly a lot to the Koch brothers, who spent untold hundreds of millions on the 2012 election... and weren't too pleased with their return on investment.
What makes the L.A. Weekly report all the more exciting — if a little far fetched — is the looming giant in the wings: Murdoch has been eyeing the L.A. Times and Chicago Tribune for months now. It's been reported that Murdoch "covets" the Times as a potential addition to his empire of more than 175 newspapers. There were reports of his interest as far back as last June. Then there were dueling reports of Murdochian interest in the Times, in particular, in October: one from the Times itself, and another from Murdoch's Wall Street Journal. This was described by Daily Intel's Joe Coscarelli as "media mogul equivalent of flirting." In December, Murdoch was planning "to take a close look at Tribune Co.'s newspaper assets once they’re available," Bloomberg's Lee reported.
So, now that the table could be set for a bidding war, it comes down to which side has a better chance of succeeding. The Kochs haven't confirmed their interest — they don't ever confirm much of anything in public — so the rumors of their involvement should be taken "with a grain of salt if not a whole dollop," as Aron suggests. But there's no question of whether or not they can afford to buy the papers: The Koch brothers are worth an estimated $50 billion. They could find the money for a Tribune Co. purchase in their couch cushions. The question becomes whether or not they would want to own a slate of struggling newspapers. They don't own any newspapers now, but are certainly no strangers to wielding influence on the news of the day. They're also no strangers to the reality of a print operation in 2013 — namely, bleeding green.
Of course, a purchase by Murdoch and his newly spun off News Corp. publishing wing seems much more likely, if Tribune Co. is going to hand over its assets to one conservative baron or the others. When the company finally does split into two pieces in June, the publishing arm will have $2.6 billion in cash on hand and no debt, according to recent S.E.C. filings. That amount of money is more than enough to buy the Tribune Co. papers, for those keeping track at home. The amount of cash Murdoch granted "PubCo," as its rumored to be titled, "is slightly higher than investors had anticipated, leading to speculation that it might be used to acquire additional newspapers," The New York Times' Amy Chozik reported last week. On the other hand, the monstrous pile of cash could be used "just to shore up the publishing business," as Bloomberg's Edmund Lee wrote. And, hey, maybe the Kochs are looking for a new strategy before the next round of unchecked campaign financing — this time with some ink on their hands.
This article is from the archive of our partner The Wire.
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