By: Mark Fitzgerald
In for a penny, in for a pound — that was the thinking inside the Lozano family over the past year as they contemplated buying out the 50% stake that the Tribune Co. held in their venerable Spanish-language daily La Opini?n in Los Angeles.
As Jose Ignacio Lozano explains to E&P, the goal of buying out the Tribune was not simply to be independent, but to build a chain of Spanish-language papers on the newspaper his grandfather founded in 1926.
“That was the whole idea from back in 1990 when we partnered with Times Mirror,” Lozano says. The problem was that the Times Mirror partnership never really accomplished much and Tribune — which inherited the La Opini?n stake when it bought Times Mirror three years ago — had its own strategy for a national Spanish-language paper, the tabloid Hoy. Launched from Tribune’s Newsday in Melville, N.Y., Hoy started a Chicago edition last fall — and is likely to start an L.A. edition as soon as this month.
“So from the time we knew we wanted to shed the partnership with Tribune,” Lozano says, “we knew, first, we would have to raise the capital for a divestiture. And, second, we said, if we’re going to do that, why not take the next step and really raise a lot of capital to get the weight we’ll need to extend the brand.”
With UBS Investment Bank as their adviser, the Lozanos found there are plenty of venture capitalists (VCs) on the lookout for Spanish-language print. “UBS got about a dozen or so calls from good alternative suitors,” Lozano says. One big player stood out, though: the CPK Media consortium led by L.A.-based Clarity Partners, which alone has some $800 million in committed capital for investments in media businesses. The other CPK partners — BMO Halyard Partners from New York City and ACON Investments from Washington, D.C. — bring a combined $850 million to the table, while the newspaper consultants Knight Paton Media are well-known in Hispanic publishing circles. (See “Lozanos, CPK Media Form Latino Newspaper Chain”.)
“It was about as perfect an alignment of stars as you could get,” Lozano says.
He adds that the deal was really sealed in the family’s view when CPK last summer acquired El Diario/La Prensa, the 100-year old New York City tabloid, and appeared to be on its way to starting a national Spanish-language chain.
“It then became a logical and easy extension of our strategy to [divest] the one and jump into [a partnership with] the other,” Lozano said.
La Opini?n, which will now be run by Jose Lozano’s sister, Monica, is gearing up for the expected daily war in Los Angeles. It has strengthened its distribution system and ramped up its promotion, including a successful circulation-building promotion that concluded just before the holidays.
Still, Jose Lozano has nothing but good things to say about Tribune. “We really are appreciative of the respect they have shown during this process,” he said. “We had hard negotiations, as you’d expect, and they have their own national strategy … But both [Tribune Publishing President] Jack Fuller and his team and the [Tribune] M&A [mergers and acquisitions] side have wished us well, and I appreciate the sentiment.”
As the vice chairman of the new company Impremedia LLC, Jose Lozano will now focus on building a Spanish-language newspaper and print media chain. Initially Impremedia concentrated on individual properties, other Spanish-language dailies and weeklies the company might approach. Now, though, the corporate focus is on identifying markets first, and then buying or building papers. Lozano won’t say where he’s looking, but a demographer could make an easy prediction: Houston, Dallas, Chicago, south Florida — anywhere the Latino population has become substantial.