Private equity firm completes acquisition of Union-Tribune
Private equity firm Platinum Equity has completed its purchase of The San Diego Union-Tribune, one of the most-read dailies in California.
Forty-one percent of adults in the Union-Tribune's distribution area read the Sunday paper, compared to 23% at the Los Angeles Times. As of September 28, 2008, the Union-Tribune had an average weekday circulation of 269,819, and a Sunday circulation of 342,384. The acquisition, for an undisclosed amount, is Platinum Equity's first attempt at the newspaper business, but Platinum is confident in the paper's future revenue potential and may buy more media properties in the future.
“As with all of our investments, we expect to create value over the long term and, we're making the acquisition as an investment,” said Mark Barnhill, principal for Platinum Equity. “When we look at investments, we have a whole array of criteria to determine if it's reasonable that includes the essential nature of the business, how it is performing operationally, whether we're in the position to make improvements, whether there's potential for complementary acquisitions in the space and whether there's opportunity for us to expand the brand and it's reach and grow market share.
“We're a firm that specializes in acquiring and creating value in businesses that need operational support and that often are in what I would describe as markets that are in distress or in decline,” Barnhill continued. “In that context, this industry fits the profile of the type of industries we look at. Having said that, we believe we got a strong asset in an admittedly declining market and have a strong base to build on here.”
The firm admitted that it expects “immediate restructuring” to take place, according to an interview with the Union-Tribune, but executives are adamant that the paper will continue publishing regularly in print and online.
To aid in the restructuring process, Platinum is tapping the expertise of David H. Black, owner of community newspaper publishers Black Press Ltd. Black will serve as “senior adviser and partner” at the newspaper, alongside Platinum's Paul Bridwell, who was named chief restructuring officer and who will serve as senior executive of the Union-Tribune until a publisher is named. David C. Copley was the previous publisher.
Platinum executives cited the Union-Tribune's low price point as a major reason it will continue to be successful. Unlike, say, the Chicago Tribune, which declared bankruptcy after a heavily leveraged buyout left it with too much debt, the Union-Tribune's new owners are in a position to capitalize the business.
“Improving the product and focusing on readership are fundamental elements of our plans for the business,” Louis Samson, the Platinum principal who led the Union-Tribune acquisition, said in an interview with the Union-Tribune. “Where and how we do that will be determined by management in a comprehensive strategic plan. We aim to ensure the Union-Tribune's relevance and value proposition — in print and online — is well-defined, well-understood and well-targeted.”
Before Platinum agreed to the acquisition in March, The Union-Tribune had been up for sale by Copley Press Inc. for eight months. The Union-Tribune was the last of the Copley Press' many newspapers in the midwest and California.