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Saturday, Dec 3, 2022

Gannett Bids for Parent Company of L.A. Times

The publisher of USA Today is making a play for the Los Angeles Times as the struggling newspaper industry feels the crunch to consolidate.

Gannett Co. Inc., based in McLean, Va., has offered $815 million to buy the Times’ Chicago-based parent company, Tribune Publishing. Shares in Tribune Publishing surged at news of the takeover bid.

What’s unclear is how the acquisition would work out for the Los Angeles Times, which would be Gannett’s second-biggest paper after USA Today. It also owns 100 local newspapers.

But analyst Hamed Khorsand of BWS Financial Inc. in Woodland Hills said combining costs will be the primary strategy. “It allows them to find ways to centralize costs in any way they can,” he said.

One of the ways to do so could be to bundle together national and international news, suggested media analyst Ken Doctor in a web post for Politico Media. “While still lacking numerous big-city markets, the new Gannett would be able to exploit its emerging national news and operational scale,” he wrote.

That could mean consolidating coverage and trimming newsrooms, an idea that local journalists find concerning.

“Gannett typically cuts staff when it buys publications, so it’s hard to see how journalism at Tribune Publishing or the Los Angeles Times could benefit from the acquisition,” said Connie Stewart, a former national news editor at the Times. “If Gannett’s bid goes through, I fear the Times’ latest Pulitzer will be its last. A pity. Bad for journalism, bad for public discourse, and bad for Los Angeles.”

But the Times might require a specific strategy, given the vast and diverse region it covers. “This is not your typical Gannett property,” said Gabriel Kahn, who co-directs the media, economics, and entrepreneurship program at USC’s Annenberg School for Communication and Journalism.

Nicco Mele, former deputy publisher at the Times, emphasized that any new leadership from outside Los Angeles would need to consider the unique and disparate communities that the Times aims to cover. “People outside the market come in with preconceived notions, then are surprised to learn the reality,” he said. “Los Angles feels like it should be more cohesive, but it’s not.”

He added that Gannett will likely look for ways to consolidate print operations, which take up the bulk of operating expenses. That may not affect the Times, which owns its own printing plant in Los Angeles.

Gannett first made its offer privately on April 12, then reiterated the offer publically on Monday, putting pressure on Tribune to reply with shareholders watching.

The offer translates to $12.25 per share and would see Gannett absorb about $390 million in debt. Shares are currently trading at $11.50, up nearly 53 percent on news of the possible acquisition.


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