The Los Angeles Times and its owner, Tribune Co., moved a step closer this week toward ending a four-year bankruptcy, raising the prospect of a media battle for ownership of the country's fourth-largest newspaper.
A judge this summer cleared the way for Tribune to exit bankruptcy as soon as the Federal Communications Commission granted the company waivers of its media ownership rules for broadcast. The FCC on Friday approved the waivers, according to a Tribune Co. news release, which means the company could emerge from bankruptcy by year's end.
Media experts predict the new controlling owners - two private investment firms and a bank - will put the Los Angeles Times, the Chicago Tribune and the company's six other newspapers on the block. The result: a high-stakes media poker game as an array of buyers maneuver to buy part or all of Tribune's publishing division.
"The new owners won't have any allegiance to any kind of legacy as an institution, family legacy or anything else," said John Morton, a Maryland newspaper consultant. Representatives of Tribune Co., which is a partner in McClatchy-Tribune News Service, and the Times declined to comment for this report.
The potential sale of such marquee properties has prompted public speculation and national news reports about potential buyers. Likely players include: Rupert Murdoch, chief executive of News Corp., which owns the Wall Street Journal and The Times of London; Douglas Manchester, who bought the U-T San Diego last year; Aaron Kushner, new owner and publisher of The Orange County (Calif.) Register; and various Los Angeles moguls who would like to restore local ownership of the Times after 12 years under Chicago control.
So far, most would-be buyers remain coy, sidestepping questions about their interest. Only Kushner has said without reservation that he wants to buy Tribune's newspapers as part of an expansion plan for his investment group, 2100 Trust LLC.
Kushner and co-owner Eric Spitz, president of Freedom Communications Inc., the Register's parent company, entered the industry without any previous newspaper background. Kushner most recently headed a Boston greeting card company and Spitz was chief financial officer for Narragansett Brewing Co. They emerged last summer as the successful bidders for the Register and have now set their sights on the Times and other newspapers.
"We do think of the Los Angeles Times as an incredibly important institution," Kushner said. "We would be honored to acquire the Los Angeles Times if they successfully are able to come out of bankruptcy."
He said the other Tribune newspapers play a similarly important role in their communities and are the kinds of media properties that interest his investment group. Kushner has hired Morgan Stanley as a financial adviser to help with his acquisition plans. The publisher, however, declined to say where funding would come from for a Tribune purchase.
One potential hurdle for the Freedom bid is possible antitrust concerns by federal regulators, who review whether a company might unfairly dominate a market, particularly in advertising. Newspaper industry supporters have contended that with the advent of the Internet and other media, antitrust issues are less of a concern, but the matter has not been settled.
While some buyers may want individual Tribune properties, media industry experts say the Tribune Co.'s newspapers likely will be sold as a group - at least initially.
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