Eli Broad at his future museum. Gary Leonard/Downtown News
Eli Broad has a very big week ahead of him that has nothing to do with the Los Angeles Times. His personal art museum on Bunker Hill is opening (to not especially glowing reviews.) But behind the scenes, media analyst Ken Doctor wrote over the weekend, Broad is not finished with his pursuit of buying the Times. What's happening now, says Doctor, is a stare-down between Broad and Jack Griffin, the CEO of Tribune Publishing who felt threatened by Austin Beutner and had him escorted out of the building last week. That set off the reaction I've been reporting on since a few hours before Beutner got the official word, including the protest letter signed by Broad and 60 other community leaders, and former publisher Tom Johnson's email on Saturday.
It’s power vs. power. Who will blink first — and, importantly, how quickly?
This is a battle, now public, for ownership of the Times, and its sister paper, the San Diego Union-Tribune, which Beutner and Griffin bought just four months ago, creating the California News Group. That group – even without the Orange County Register, a compromised franchise that by business logic would roll into the group at some not-to-distant point – reaches the largest single largest regional population in the country, somewhat under 20 million. The stakes here are big.
While the letter only makes the point of local direction, and of support for Beutner’s civic-oriented strategies, Griffin will read all these pressures between the lines of this letter, as we do.
In L.A., out of the blue, a bigger civic–corporate gauntlet is now thrown down, and TPUB’s management and board now must newly strategize. Intriguingly here, it is capitalists challenging the freedom of ownership to do as it pleases. That’s a phenomenon we haven’t seen much in the chaos of ownership, cutback and misery that has consumed America’s regional press for more than half a decade.
Though we did see it previously in the culture clash between Los Angeles and Tribune suits in Chicago. Most of these same LA community interests publicly called on Tribune to relinquish the Times to local ownership several years ago, when Chicago was earnestly dismantling the LA Times of old. This time, I'm seeing a broader community upset. Latino leaders spoke out over the weekend and African American leaders such as county Supervisor Mark Ridley-Thomas are protesting too. Ridley-Thomas and white Supervior Mike D. Antonovich, a conservative with no particular love for the Times, plan to offer a motion at the supervisors meeting on Tuesday.
Doctor notes that "in the midst of this Griffin/Beutner/Broad affair squarely sits" Eddy Hartenstein, the former Times publisher who recruited Beutner and who is now chairman of Tribune Publishing, the newspaper's parent company. It was Hartenstein, Doctor says, who urged Broad to make his recent offer for the Times (and San Diego Union-Tribune.) "Hartenstein is truly the man in the middle," Doctor writes. And the elephant in the room is whether Broad, or someone else, could make a lucrative offer for the Time that the Tribune Publishing board would be obligated to take, in the best interests of the public company's shareholders.
if shareholders believe they can recover some of their share price losses through an L.A. sale, some could be inclined to push for it. One theory: activist shareholders push for a profitable sale and demand a special dividend out of it, to assuage the paper loss in their holdings.
If Eddy Hartenstein finds himself wearing a few hats at this party, the position of Bruce Karsh, co-chairman and chief investment officer of Oaktree Capital Management, still the Tribune’s single largest shareholder with a 15% stake, proves pivotal. What does Karsh – an L.A. resident, close to a number of parties in this growing dispute – want to do?
The Tribune board must anticipate that the Broad offer won’t now go away easily.
Doctor also notes that new Times publisher Timothy Ryan has a clause for extra severance "in the case of a change in control" of the Times.