Koch brothers eye bid for Tribune papers, including the L.A. Times
Koch Industries is exploring a bid to buy the Tribune Co.’s eight regional newspapers, including the Los Angeles Times, the Chicago Tribune, The Baltimore Sun, The Orlando Sentinel and The Hartford Courant.
The New York Times
Three years ago, Charles and David Koch, the billionaire industrialists and supporters of libertarian causes, held a seminar of like-minded, wealthy political donors at the St. Regis Resort in Aspen, Colo. They laid out a three-pronged, 10-year strategy to shift the country toward a smaller government with less regulation and taxes.
The first two pieces of the strategy — educating grass-roots activists and influencing politics — were not surprising, given the money they have given to policy institutes and political-action groups. But the third one was: media.
Other than financing a few fringe libertarian publications, the Kochs have mostly avoided media investments. Now, Koch Industries, the sprawling private company of which Charles Koch serves as chairman and chief executive, is exploring a bid to buy the Tribune Co.’s eight regional newspapers, including the Los Angeles Times, the Chicago Tribune, The Baltimore Sun, The Orlando Sentinel and The Hartford Courant.
By early next month, Tribune Co. is expected to send financial data to serious suitors in what will be among the largest sales of newspapers by circulation in the country. Koch Industries is among those interested, said several people with direct knowledge of the sale who spoke on condition of anonymity. Tribune emerged from bankruptcy Dec. 31 and has hired JPMorgan Chase and Evercore Partners to sell its print properties.
The papers, valued at roughly $623 million, would be a financially diminutive deal for Koch Industries, the energy and manufacturing conglomerate based in Wichita, Kan., with annual revenues of about $115 billion.
Politically, however, the papers could serve as a broader platform for the Kochs’ laissez-faire ideas. The Los Angeles Times is the fourth-largest paper in the country, and the Tribune is No. 9, and others are in several battleground states, including two of the largest newspapers in Florida, The Orlando Sentinel and the Sun Sentinel in Fort Lauderdale. A deal could include Hoy, the second-largest U.S. Spanish-language daily newspaper, which speaks to the pivotal Hispanic demographic.
One person who attended the Aspen seminar who spoke on condition of anonymity described the strategy as follows: “It was never ‘How do we destroy the other side?’ ”
“It was ‘How do we make sure our voice is being heard?’ ”
Guests at the Aspen seminar included Philip Anschutz, the Republican oil mogul who owns the companies that publish The Washington Examiner, The Oklahoman and The Weekly Standard, and hedge-fund executive Paul Singer, who sits on the board of the political magazine Commentary. Attendees were asked not to discuss details about the seminar with the media.
At this early stage, the thinking inside the Tribune Co., the people close to the deal said, is that Koch Industries could prove the most appealing buyer. Others interested, including a group of wealthy Los Angeles residents led by billionaire Eli Broad and Ronald Burkle, both prominent Democratic donors, and Rupert Murdoch’s News Corp., would prefer to buy only the Los Angeles Times.
The Tribune Co. has signaled it prefers to sell all eight papers and their back-office operations as a bundle. (The $7 billion media company, which owns 23 television stations, could also decide to keep the papers if they do not attract a high enough offer.)
Koch Industries serves as one of the largest sponsors of libertarian causes, including the financing of policy institutes such as the Cato Institute in Washington, D.C., and the formation of Americans for Prosperity, the political-action group that helped galvanize tea-party organizations and their causes. The company has said it has no direct link to the tea-party movement.
Koch Industries recently brought on Angela Redding, a consultant based in Salt Lake City, to analyze the media environment and assess opportunities. Redding, who previously worked at the Charles G. Koch Charitable Foundation, did not respond to requests for comment.
At least in politically liberal Los Angeles, a conservative paper could be tricky. David Koch, who lives in New York and serves as executive vice president of Koch Industries, has said he supports gay marriage and could align with many residents on some social issues, Reed Galen, a Republican consultant in Orange County, Calif., said.
Koch Industries’ main competitor for the Los Angeles Times is a group of mostly Democratic local residents. In the 2012 political cycle, Broad gave $477,800, either directly or through his foundation, to Democratic candidates and causes, according to the Center for Responsive Politics. Burkle has long championed labor unions. President Clinton served as an adviser to Burkle’s money-management firm, Yucaipa, which in 2012 gave $107,500 to Democrats and related causes. The group also includes Austin Beutner, a Democratic candidate for mayor of Los Angeles, and an investment banker who co-founded Evercore Partners.
“This will be a bipartisan group,” Beutner said. “It’s not about ideology, it’s about a civic interest.” (The Los Angeles consortium is expected to also include Andrew Cherng, founder of the Panda Express Chinese restaurant chain and a Republican.)
Last month, shortly after LA Weekly first reported on Koch Industries’ interest in the Tribune papers, the liberal website Daily Kos and Courage Campaign, a Los Angeles-based liberal-advocacy group, collected thousands of signatures protesting such a deal.
Seton Motley, president of Less Government, an organization devoted to shrinking the role of the government, said the 2012 presidential election reinforced that conservatives need a broader media presence.
“A running joke among conservatives as we watched the GOP establishment spend $500 million on ineffectual TV ads is ‘Why don’t you just buy NBC?’ ” Motley said. “It’s good the Kochs are talking about fighting fire with a little fire.”