The fate of the Los Angeles Times remained uncertain Monday after Tribune Co., its corporate parent, announced an $8.2 billion deal with Chicago real estate mogul Sam Zell to take the company private.
The deal scuttled a competing bid by Los Angeles moguls Eli Broad and Ron Burkle designed in part to return the acclaimed paper to local control.
Tribune’s ownership of the Times has been rocky. Disputes between the Chicago-based corporation and leaders at the Times have led to the dismissal of two publishers and two editors.
Times staff members have been bracing for the possibility of further cuts as Tribune seeks to improve profits.
Employees were somewhat relieved that the six-month bidding process had ended but remained unsure about what to expect in the months ahead.
“There is a sense of relief. Finally there is some resolution,” Times reporter Mark Z. Barabak said. “Whether it proves to be good or bad we will not know for some time.”
The complicated deal would give Zell 40 percent ownership of Tribune Co., with the rest owned under an employee stock plan.
If the deal wins regulatory approval and is completed, Tribune would be saddled with $13.4 billion in debt, according to Bear Stearns analyst Alexia Quadrani.
Tribune chief executive Dennis FitzSimons pointed out that taking the company private will remove pressure to satisfy Wall Street expectations.
“As a private company, operating outside the glare of the public markets, we will be better able to focus on long-term growth as we transform our publishing and broadcasting businesses,” FitzSimons wrote in a message to Times employees.
Current Times publisher David Hiller tried to reassure employees that journalistic quality would remain a priority.
“Our mission is the same today as it was yesterday – continue to aggressively reinvent our organization as the indispensable, dynamic and round-the-clock destination for differentiated news and information for Southern Californians, wherever, however, and whenever they need it,” he told Times employees in a separate message.
The bidders expressed different reasons for pursuing the media giant.
Zell has said he views Tribune as an investment and has not discussed its journalistic endeavors.
“There’s no track record as far as I can see as what to think of the new owner in terms of this outpost of the empire,” said Marty Kaplan, associate dean of the Annenberg School for Communication at the University of Southern California.
A former Times worker said more layoffs could take a significant toll.
“If they unleash a big layoff or buyout package, they will trigger a talent exodus beyond their control and that’s something to worry about,” said former Times investigative editor Vernon Loeb, who is now metro editor at the Philadelphia Inquirer.
“Wouldn’t it be great if Sam Zell says, ‘I didn’t buy these newspapers to shred them?'” Loeb said.
Broad has said he views newspapers as a civic trust, and Burkle has tried twice before to buy newspaper chains.
Neither Broad nor Burkle offered any comments on the deal or whether they might increase their bid or make a play only for the Times.
But FitzSimons said the company was not looking at selling any assets beyond the announced sale of the Chicago Cubs baseball team and Tribune’s 25 percent interest in Comcast SportsNetChicago.
“We don’t anticipate any other newspaper sales,” FitzSimons told The Associated Press. “This is a whole company transaction.”