Bloomberg News

Koch Industries Backs Away From Bidding for Tribune’s Newspapers

August 23, 2013

Koch Industries Inc., which drew protests earlier this year over speculation that it might buy the Los Angeles Times or other Tribune Co. (TRBAA:US) publications, said it’s no longer interested in bidding for the newspapers.

Melissa Cohlmia, a spokeswoman for the Wichita, Kansas-based company, confirmed a report yesterday from the Daily Caller website saying that Koch Industries wouldn’t be buying any of Tribune’s daily newspapers after conducting a review.

“Koch continues to have an interest in the media business and we’re exploring a broad range of opportunities where we think we can add value,” she said in an e-mail. “In terms of the Tribune, the Daily Caller story is accurate.”

In May, union groups rallied outside the Los Angeles offices of Tribune investor Oaktree Capital (OAK:US), trying to ward off a sale to the company, a closely held business controlled by the billionaire Republican donors Charles and David Koch. At the time, Tribune Chief Executive Officer Peter Liguori said speculation over potential buyers was “premature.”

Two months later, Tribune Co. announced plans to spin off its newspapers into a separate business. The move let the company focus on its TV operations and signaled that it wouldn’t seek an immediate bidder for the papers.

Bankruptcy Exit

Tribune, which emerged from bankruptcy at the end of 2012, had hired advisers to evaluate interest from newspaper buyers, according to people familiar with the process. The company’s publishing group was valued at about $623 million in its bankruptcy filings last year, $300 million lower than a January 2011 estimate.

The spinoff doesn’t preclude Tribune from selling some or all of its newspapers in the future, a person with knowledge of the company’s thinking said in July. Even so, Koch Industries has lost interest in buying the papers after conducting due diligence, the Daily Caller reported. The company determined that acquiring the publications wasn’t economically viable, the website said.

Labor groups, including the AFL-CIO, had raised concerns about a Koch purchase, citing the Koch brothers’ support for initiatives such as California’s Proposition 32, a failed ballot measure that would have prohibited unions from using payroll deductions for political purposes without permission.

The Kochs had been named among several potential Tribune buyers -- a group that included News Corp., Berkshire Hathaway Inc., Wrapports LLC and Freedom Communications Inc., people familiar with the negotiations said in March.

Berkshire CEO Warren Buffett, who has spent more than $340 million acquiring community newspapers, told Tribune’s Allentown Morning Call that he might be interested in buying that publication.

Rupert Murdoch, the billionaire chairman of News Corp., has expressed interest in the Los Angeles Times, people familiar with the matter have said. The publication would let him add coverage of the entertainment business to a stable of papers that includes the Wall Street Journal, the New York Post and the U.K.’s Sun.

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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Companies Mentioned

  • TRBAA
    (Tribune Co)
    • $85.21 USD
    • -0.04
    • -0.05%
  • OAK
    (Oaktree Capital Group LLC)
    • $49.23 USD
    • 0.21
    • 0.43%
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