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Sniffing an opportunity at the [Chicago] Sun-Times?(Dinosaur Media DeathWatch™)
The Chicago Reader ^ | June 19, 2009 | Michael Miner

Posted on 06/19/2009 3:19:31 PM PDT by 2ndDivisionVet

We hear Platinum Equity has been doing some serious tire kicking at the bankrupt Sun-Times Media Group, which is not only ready but eager to deal. Platinum Equity is a Beverly Hills-based private-equity company that, in its own words, finds itself "typically working with 'strategic sellers' that seek to shed a non-core asset in order to refocus their business operations." The STMG is willing to shed everything -- in one swoop or in bits and pieces.

This March Platinum Equity bought the formerly prosperous, influential San Diego Union-Tribune -- for what online newspaper analyst Ken Doctor said was reportedly a "song" -- and brought in Canadian publisher David Black (no relation to Conrad) as strategic adviser. Two years earlier Black had bought the Akron Beacon-Journal, and Doctor looked to Akron for clues as to what Black intended for San Diego. Doctor said the Union-Tribune's staff and readers should find no encouragement in the Beacon-Journal example. "Mainly, the Beacon-Journal, like most of its brethren, has gotten smaller. At least three rounds of layoffs have reduced the staff by more than a third." Moreover, "the Beacon-Journal has not distinguished itself in pushing its newsroom to embrace web-first, web-only, blog-friendly reporting. The online sales side is a work in progress."

So from Platinum Equity and Black, Doctor predicted this for San Diego: "Less headcount and a concentration on lower-paid, less-experienced reporting staff. Morale—never a newspaper strong suit—will take another hit." Furthermore -- "The Union-Tribune will get smaller and much more locally focused."

Is it possible for anyone to move the Sun-Times and the other STMG titles even further in that direction?

In fact, Jeremy Halbreich, the interim CEO of the STMG, thinks it is. "Any newspaper can always be more locally focused," he told me Friday. "There's always room for improvement."

Doctor believed the real attraction in San Diego was the paper's real estate holdings. He observed, "Commercial real estate has seized up in the recession and the credit crunch. But that’s cyclical. It will come back—and far faster than metro-newspaper values." There's now a Trump Tower on what was once the STMG's choicest piece of property, but many of the group's other titles are located on STMG-owned real estate.

Halbreich wouldn't comment on Platinum Equity's interest in his business, but he said, "I guarantee you, [Platinum Equity] did not buy San Diego because of the real estate." Halbreich said the old days of 30 percent profit margins are over, but he thinks that as normal businesses, making a 5 percent, sometimes 10 percent annual profit, newspapers have a future.

As for the notorious executive bonuses he's asked bankruptcy court for permission to pay his top people when the STMG assets are sold, Halbreich repeated what he said in a staff memo -- that they're necessary. But he wants no one to think that in a time of crisis senior management is getting a cushy deal. "When we have asked our employees, union and nonunion, to sacrifice, the only way I'll do it as CEO is to have senior management lead the process," Halbreich said. He estimated that in the last six months total executive compensation at the STMG has been cut by 30 to 35 percent -- primarily by eliminating jobs and making survivors double up.


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events
KEYWORDS: ccrm; dbm; dinosaurmedia; drivebymedia; economy; enemedia; msm; newspapers; presstitutes; unions

1 posted on 06/19/2009 3:19:32 PM PDT by 2ndDivisionVet
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To: 2ndDivisionVet

Does anyone think a dying industry is a good investment?? Especially the #2 paper in a market??


2 posted on 06/19/2009 3:21:36 PM PDT by GeronL (http://libertyfic.proboards.com <----go there now,----> tyrannysentinel.blogspot.com)
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To: GeronL

I think it is a fantastic investment opportunity for any liberal. Or for a union pension fund.


3 posted on 06/19/2009 3:23:47 PM PDT by MrEdd (Heck? Geewhiz Cripes, thats the place where people who don't believe in Gosh think they aint going.)
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To: 2ndDivisionVet

In other words, they want to buy the newspapers and then close them so they can sell off the still potentially valuable real estate to strip mall developers?

Kewl!


4 posted on 06/19/2009 5:32:51 PM PDT by GOPGuide
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To: GeronL

I think they just want to buy real estate assets on the cheap, they don’t care about the newspapers themselves.


5 posted on 06/19/2009 5:33:35 PM PDT by GOPGuide
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To: MrEdd

See my post at #4


6 posted on 06/19/2009 5:35:01 PM PDT by GOPGuide
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To: GeronL
It is a "dying industry" as presently structured, but people will always need--and thus pay for--local news and ads. The internet makes state and (especially) national and international reporting by local papers impractical. I agree that properly structured papers, with a well-designed web presence, have a reliably good future.

One useful analogy might be the barber in the old west who doubled as a dentist. In hindsight, we can see how evolving technology made that a failed model, but that doesn't mean we don't still need haircuts.

7 posted on 06/19/2009 5:39:55 PM PDT by Hebrews 11:6 (Do you REALLY believe that (1) God is, and (2) God is good?)
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To: GeronL
Yes, I do.

Rush Limbaugh, Ann Coulter et.al. should form a consortium and snap up all these faltering print establishments for a song and demonstrate there is nothing wrong with newspapers that can not be fixed with proper management.

Best regards,

8 posted on 06/19/2009 8:06:32 PM PDT by Copernicus (California Grandmother view on Gun Control http://www.youtube.com/view_play_list?p=7CCB40F421ED4819)
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To: Copernicus

That would be interesting to see


9 posted on 06/19/2009 8:07:41 PM PDT by GeronL (http://libertyfic.proboards.com <----go there now,----> tyrannysentinel.blogspot.com)
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