For a long time, South Florida has been a three-newspaper land. The Palm Beach Post, the Sun-Sentinel, and the Miami Herald all overlapped to some degree, giving this stranger-than-fiction region a little competition in the newspaper business. That sets us apart from the rest of the country, but it's all started to change recently, as the papers run one another's material and cut reporting jobs and circulation.
This month the Newhouse family announced that it's going to cut the print edition of the New Orleans Times-Picayune down to just three days a week, and move the reporting online. Around half the newsroom was fired last week. They made even more drastic cuts at the three papers they own in Alabama, also going down to three days a week. These steps toward liquidating the paper product are extreme, but they're a sign of a national phenomenon. Nobody knows how to make money in news anymore. That includes the Tribune Company, owner of eight daily papers including our own Broward rag, the Sun-Sentinel.
What's amazing is the plummeting market value of newspaper franchises. Less than six years ago, David Geffen reportedly made a $2 billion offer for the Los Angeles Times, one of Tribune's flagship papers, alone. Today, analysts peg the price of all eight tribune papers combined -- including the Chicago Tribune, the Sun-Sentinel, the LA Times, and others -- around $623 million. The Philadelphia Inquirer and Daily News sold for $515 million in 2006, and $55 million this year.
The people doing the buying in this fire-sale market are also not your typical media moguls of yesteryear. The Philly papers were scooped up by a group of local businessmen, who at least pledged that they'd remain hands-off with the editorial content. Not so for the U-T San Diego
, the hip new moniker of the Union-Tribune
, which was purchased by a real estate developer late last year and has since turned into a pamphlet for owner Doug Manchester's personal vendettas and business interests
The likely buyers for the Tribune papers are J.P. Morgan and a couple of hedge funds you probably haven't heard of. That kind of investment in papers isn't unusual anymore -- hedge fund Atalaya Capital Management recently bought up and spit out the Creative Loafing alt-weekly papers -- but bankers aren't likely to want to hang around and run papers forever.
That means they could be looking to hand off the Tribune papers, especially the less-marquee names like the Sun-Sentinel, just as soon as they lay their paws on them. By then, who knows what the price will be. As Shafer puts it:
I'm sure that if you were interested in Tribune's 23 TV stations, which are valued at $2.9 billion, they'd meet you for coffee.
But Tribune's eight remaining dailies - the Los Angeles Times, Chicago Tribune, Baltimore Sun, Hartford Courant, Orlando Sentinel, Ft. Lauderdale Sun Sentinel, Allentown Morning Call, and Hampton Roads Daily Press - are another story. Given the collapse of newspaper properties, the hedgies and bankers might be willing to bring Irish coffee, pastries, and the pink slips for the papers to your home in hopes of doing a quickie deal.
Shafer points out that papers in this dreary age often find that their real estate is the most valuable part of the whole company, printing presses and byline goodwill be damned. The Herald has the luxury of selling its bayfront property to a Malaysian casino outfit and high-tailing it to Doral. The Sun-Sentinel, though, just moved across downtown into a shared office building, and the most valuable thing about the paper would seem to be the public trust that has eroded with every layoff, and the rather uninspiring potential of the recently implemented paywall.
But there's real social capital in a local daily newspaper, and god knows our area needs all the coverage it can get. There are some really good journalists at the Sun-Sentinel
, too, and under good management they could produce a much better product than what we see today. It's a pity, then, that the prices the Tribune papers are likely to command will attract all manner of South Florida opportunists and short-term profiteers. As we've seen, even longtime newspaper families like the Newhouses are willing to ransack their print properties and lay off their best talent while feeding their readers pabulum about "exciting changes
." It's going to be an interesting few months. Or maybe, if we're lucky, years.