It's still a story no one can get their arms around. Almost 24 hours after the Broad-Burkle bid for the whole Tribune shebang was first reported, there are still no specifics on price and terms. One of the papers quoted a source as calling the bid "competitive," whatever that means. Of course, this is too juicy a story to let the absence of news stand in anyone's way, so there’s been a ton of space devoted to background and speculation (a little like what the cable news channels do when there is nothing new to report but they're told to keep covering the story). The WSJ, sounding like it was trying to justify all the attention, said the LAT “is becoming a symbol of the turmoil gripping the newspaper industry.” That, and having a billionaire Hollywood mogul in the hunt.
And speaking of David Geffen, there have been a few tantalizing bits about his plans for the paper – mostly about his wanting to bring in top-tier talent (must make the current newsroom folks feel loved). About the most interesting snippets of speculation involve a scenario that has gotten relatively little attention: the possible effort by Tribune management, led by CEO Dennis FitzSimmons, to take the company private. From the LAT:
There has been no evidence that Tribune management would attempt such a maneuver. But speculation has persisted, in part because former Tribune Chief Executive John W. Madigan is a partner at Madison Dearborn. (Madigan has taken a leave from the firm for the duration of the Tribune auction.) "If I were handicapping it, I would still put that scenario at the top of the list," a Tribune executive said of the possibility of management taking the company private. The executive asked not to be named because he was not authorized to talk about such a deal.
Something to consider about Broad: He has a history of expressing an interest in properties, but never closing the deal. That happened with efforts to start an NFL franchise in L.A., as well as buying the Dodgers. Something to consider about both Broad and Burkle: They're used to being solo investors. Something to consider about Tribune's board, which eventually will have to figure out how to resolve this mess: It's made up of Chicago bizboys who go to the same clubs, hang out with the same people and look at the world in pretty much the same way. FitzSimmons is part of that crowd. For Broad, Burkle or Geffen to stand a chance, their offers would need to be well above and beyond what Tribune could get elsewhere - and it must be structured so no one gets stuck with a huge tax bill.
My own uninformed view is that those Tribune guys will do whatever they can to avoid handing over their company to a bunch of L.A. billionaires - unless the dollars are just too compelling. Business is business and all that, but it's funny how emotion can sometimes get into these things, especially when the competing offers are relatively close (even a lower per-share bid could be preferred because of other deal elements). Oh, and I wouldn't pay too much attention to the rumbles about how Broad, Burkle and Geffen are willing to make less money than what Tribune is now demanding. You know, the bit about the LAT being a civic institution and therefore less subject to the same P&L considerations faced by any other business in town. Right. Sure, these guys want to come off as local heroes for saving the paper from those dastardly Chicago money-grubbers, but they also want to show the world that they can succeed financially where others have failed. That's part of the challenge - that's why they're in the game.
Bottom line is that there's no way of knowing how this thing will play out. The speculation you're reading about this morning is entertaining but not terribly revealing because most of it is coming from people either on the outside - who don't know anything - or people on the inside who are spinning the story to suit their needs. To follow what's going on, the best bet is keep watching the numbers - particularly Tribune shares. And just consider this: After a 2 percent bump yesterday when the Broad-Burkle bid was reported, Tribune stock is only up a few pennies this morning - at $32.51. That wouldn't suggest Wall Street is all that worked up yet.