Bruce Karsh, the Los Angeles-based co-chairman of Oaktree Capital Management, controls about a fifth of the shares of Tribune Publishing and is said to be upset at how the company abruptly dumped Austin Beuter and his strategy for the Los Angeles Times. According to a Friday story in Crain's Chicago, Karsh has been in "discussions" with Eli Broad and other high rollers about a bid to buy the paper. Crain's author Lynn Marek says it's possible that Karsh, Broad and Beutner all had a chat at last night's gala dinner for Broad's new art museum on Bunker Hill. Karsh had no comment through a spokesperson; the Crain's story follows Tribune Publishing's statement last night about being committed to Los Angeles.
From Crain's today:
Karsh and Broad are longtime friends and once worked together at one of Broad's companies, SunAmerica. They're also a part of the same social circle as Beutner, whose dismissal has stirred up a firestorm of protest. This week the sturm und drang spread to the Los Angeles County Board of Supervisors, which approved a resolution to restore local leadership of the largest paper in the market and the fourth-biggest in the country, by print circulation.
“There's a backlash here and it's serious and it's the leadership of Los Angeles,” said former U.S. Trade Representative Mickey Kantor, one of the LA leaders calling for new ownership of the paper. “Bruce Karsh understands this better than anybody at this point.”
Kantor and others who are knowledgeable about plans for a possible bid, maybe even for the entire company, won't talk details. That apparently was also the problem with recent interest expressed by Broad in a proposal—he never made a formal offer or named a price, according to sources.
Those details are key for Tribune Publishing CEO Jack Griffin, who has a fiduciary responsibility to stockholders to maximize the value of their shares. He has his hands full on that front, with the newspaper industry's revenue continuing to drop and Tribune Publishing's stock price plummeting to an all-time low of $10.25 on Sept. 15, down 60 percent from its peak of $25.50 in July 2014. (The stock closed at $10.82 yesterday.)
It's an ironic turn of events for Karsh, who was a key architect of the paper's direction in recent years. He stayed on at more-profitable Tribune Media as chairman after Tribune split in two, but before the breakup he played a role in installing Californian Eddy Hartenstein as Tribune Publishing's chairman last year and they both at least assented to the appointment in March 2014 of Griffin, who really leads the company from New York despite the company's Chicago headquarters.
Meanwhile, media industry analyst Ken Doctor is out today with a long examination of the Los Angeles Times situation in Harvard's Nieman Lab. The subhead cuts to the chase: We know what continued ownership by Tribune Publishing looks like for the Los Angeles Times: cuts, cuts, and more cuts. A private, local owner would offer a better chance for sustainable success.
He says the Beutner-Jack Griffin partnership was fated to fail — "suffering fools, or company foolishness, is not one of Beutner’s core competencies, and, he does little to disguise it" — and he's surprised it lasted 13 months. By the way, Doctor says that Karsh and Oaktree's stake in Tribune Publishing is more like 15 percent.
Today, the Times can only claim a household reach of 7.4 percent in the L.A. designated market area. That’s right: Only one of 14 households take the paper. Yes, the Times’ digital reach is much greater, but that print reach number tells the story of civic decline.
It’s the place of the Times in greater L.A. — the digital, print, and in-person Times — that should drive the Tribune/Times story forward. Don’t be distracted by the sometimes-cartoonish depictions of the drama. We’ve seen all the familiar storylines quickly dusted off: Chicago vs. L.A. Chain vs. local. CEO vs. publisher. Tyrant vs. hero. Billionaire philanthropist vs. corporate chieftains. While each offers elements of truths, they don’t offer the insight we need.
In short, it’s the Austin Beutner model — however flawed anyone thinks its execution was, or would be — that should compel us. It’s what makes this particular tale of newspaper chaos distinguishable from the long list of examples elsewhere. It’s what makes the L.A. Times case consequential to news publishers everywhere, and what makes the coming fight over the Times’ ownership a point of national interest.
Also this about Beutner building bridges to LA minority communities that the Times has not done in quite some time:
Beutner also reached out more widely to L.A.’s majority non-white communities, both in his hires and in his intended products. His new emerging teams at the Times sometimes left him, ironically, the only older white guy in the room.
It’s noteworthy that both Latino communities and African-American politicians have supported him publicly since he was fired; the Times hasn’t always had the greatest relationships with the new L.A.
Word is that even parts of the newsroom were coming along, although it’s hard to how big those parts were — or may be. (Anyone who’s been around this business knows that waiting for whole newsroom buy-in is an impossible proposition.)
All of these initiatives raised eyebrows at Tribune’s Chicago HQ; they weren’t part of Griffin’s own turnaround plan. They were audacious and could only be led by someone with as big an ego as Beutner. Beutner was doubly the man for the job.
Doctor makes a great point that as the Internet pushes media outlets to become bigger and go after national ad dollars and more powerful technology, local news is getting (his emphasis) crushed.
Folks, fellow citizens, this is a news emergency. As our eyes fixate on the Trump circus, we know less and less about our communities every day.