By: Jennifer Saba
Why now? Why put The San Diego Union-Tribune — a major metro at that — on the block during a time that could kindly be described as one of the most challenging for the industry?
For years, there was speculation that the Copley family, who have run the Union-Tribune in one form or another since 1928, was looking to unload its flagship.
“We feel now is the right time due to influences in the market, particularly in a real estate-dependent market like San Diego,” wrote Union-Tribune spokesperson Drew Schlosberg. “We’re confident the business will turn around, but as noted previously the uncertainties today make the risk too great for us to not explore options.”
But are we really at the bottom?
“I don’t know for sure how to read this,” said John Morton of Morton Research who tempered the notion that the Copleys are looking for an escape hatch. “It may mean the family, whose head is ailing, may have just decided to get out while the going is good.”
Copley Press has been shedding properties over the last couple of years, whittling itself down to its Union-Tribune.
The company sold the Daily Breeze of Torrance Calif., for an estimated $25 million to Hearst in 2006 according to paper. Shortly after that sale, Copley unloaded nine of its newspapers in Illinois and Ohio to GateHouse Media for $380 million. In May, Creators Syndicate snapped up Copley News Services (CNS) for an undisclosed sum.
That left the Union-Tribune and its ancillary products like Today’s Local News and Enlace, its Spanish-language news publication.
According to Copley Press Executive Vice President Harold W. Fuson, as of late May the company intended to keep operating the Union-Tribune. Fuson told E&P’s Dave Astor after the CNS sale: “We made a decision a few years ago to focus on our flagship — the San Diego Union-Tribune. Copley News Service played a much different role in our company when we had a group of newspapers spread across several states.”
The economy, Fuson contended figured only partly in the decision to unload CNS. “In an economy like this, you have to be more careful about how you use your resources. You have to focus even more sharply on your core business,” Fuson told Astor.
Will San Diego languish on the market like, say, Landmark Communications’ properties which, as newspaper broker John Cribb pointed out, are in good markets like Norfolk, Va., and Greensboro, N.C.?
The Batten family, which controls Landmark, put its papers and other properties up for sale at the beginning of the year. Landmark sold the Weather Channel for a reported $3.5 billion to a consortium led by NBC Universal and two private equity firms. The newspapers are still up for auction.
Most of the players willing to participate in any newspaper transactions are now sidelined, explained John Cribb of Cribb, Greene & Associates. Complicating matters is the Britney Spears-esque negative publicity affixed to the industry; bankers and other lender are in no hurry to front large sums of cash to buy a newspaper, Cribb said.
Former newspaper analyst Lauren Rich Fine, who still keeps close tabs on the industry, said she wasn’t shocked to see the news of a possible sale. “It’s somewhat reminiscent to me of McClatchy selling the Star Tribune,” said Fine who is now working with Kent State University. “It’s a really difficult environment with fewer economies of scale.”
On this ominous note she added: “Things feel like they are getting worse, not better.”