Koch Brothers Ditch Plans To Buy Tribune Co. Newspapers
By Chuck Sudo in News on Aug 23, 2013 2:40PM
Billionaire industrialists and conservative astroturfers Charles and David Koch have cooled on buying Tribune Co.’s newspaper properties, including the Chicago Tribune and Los Angeles Times, according to sources who spoke with The Daily Caller. The Kochs formally expressed their interest in the papers in April.
A thorough review of Tribune Co.’s financials by Koch Industries determined the newspapers weren’t economically viable. Tribune’s most recent financial reports indicate most of the company’s revenue comes from its newspapers, but that’s inflated by the money earned from the company’s digital assets, in particular CareerBuilder.com and Classified Ventures LLC.
The Wall Street Journal reported in June a “founders’ agreement” in place allows Tribune’s newspapers to sell local ads on behalf of the websites, boosting the papers’ digital ad revenue. Any sale of the newspapers could place those arrangements in jeopardy.
Even though most of Tribune Co.’s generate the lion’s share of the revenue, their profits overwhelmingly come from their broadcast and online concerns, which is why Tribune announced last month they were splitting the newspapers into a separate company, Tribune Publishing Company, while the online assets including CareerBuilder and Classified Ventures would remain with Tribune Co. Spinning off the newspapers into a separate company would shield Tribune from the tax burden it would face if they tried to sell off the papers outright. But who wants to buy a group of newspapers without the online assets that provide the revenue? Koch Industries analysis determined CareerBuilder.com and Classified Ventures provided half of the company’s revenue.
The Kochs interest in buying Tribune Co.’s papers led to concerns the newspapers would promote their conservative viewpoints but the Chicago Tribune’s editorial board already leans conservative.