These are two huge deals, with L.A. having a lot at stake. Who will wind up owning the LAT? Who will take over Anschutz Entertainment Group - and with it, the Kings, the Galaxy, part of the Lakers, Staples Center, L.A. Live (not to mention the downtown football stadium headache)? We all want names, and yet there's no way to determine how each sale is unfolding and what the eventual outcome will be. The sellers aren't talking, at least publicly, and the unnamed sources who pop up in news stories are notoriously unreliable. Besides, the sale process can change quickly - does anyone know whether Guggenheim Partners, the new owner of the Dodgers, is still bidding for AEG? I've seen stories that say yes, no, maybe, and probably not. Maybe they all were true at one point. Both deals are especially complicated because they involve multiple assets (AEG involves multiple businesses), and the two sellers - Tribune Co. and billionaire Philip Anschutz (pictured) - would prefer to sell their properties as groups, not individually (it's easier to unload the dogs that way). But who wants to get stuck with a dog that the seller says is worth more than a buyer wants to pay? Anyway, the AEG sale, if there is one, will probably be resolved sooner than the sale of the LAT and the other Tribune papers - if only because it's been on the market longer and I can't imagine Anschutz wanting his sports-and-entertainment empire moldering on the sales block. Here's my take during this week's Business Update on KPCC:
Susanne Whatley: The owner of the L.A. Times is selling all its newspapers. We heard Warren Buffett say yesterday he is NOT interested. So, business analyst Mark Lacter, who is?
Mark Lacter: Plenty of people, Susanne - the question, as always, is at what price. And that's why Tribune Co., which owns the Times, along with the Chicago Tribune and a bunch of smaller papers, is trying to determine the level of interest. Now, just to recap, Tribune Co. recently came out of bankruptcy protection, and the company is now owned by a group of bank and investment firms that were the major creditors from that bankruptcy. There's a new board and a new chief executive, and they all seem more interested in the company's TV stations than in its newspapers. And, strangely enough, the market for newspapers has been heating up: last year, 84 daily papers were sold in the U.S. - that's the highest number of sales since 2007. So, maybe the Tribune people figure this would be a good time to unload these properties.
Whatley: But I thought newspapers were dying?
Lacter: Well, not entirely - operating profits are way down from two or three decades ago, though the L.A. Times and other major papers continue to make money, which certainly attracts potential buyers. And, newspapers are a bargain these days compared with before the recession.
Whatley: Bloomberg has reported that Tribune wants to sell the papers to a single buyer or group...
Lacter: That's right, even though several potential bidders have shown an interest in only the Times. Rupert Murdoch is one. Also, L.A.'s former deputy mayor Austin Beutner is trying to put together a group of wealthy Angelenos to make an offer. I'm sure there are others. Just know that it's very early in the process, and in the end these things rarely have anything to do with the quality of the buyer but rather the quality of the price. If the Times does get sold, the new owner is going to have a newspaper that's significantly smaller than in its heyday. The newsroom has just over 500 people - that's down from the peak of 1,300 people, according to the LA Weekly.