Koch brothers interest in LAT seems like more than a rumor, but...

lat2.jpgIf it ever happened, the purchase would be a jaw-dropper all right, but it also would be a head-scratcher. On its face, buying the LAT and Chicago Tribune (Reuters reports that they're mostly interested in those properties) would fly in the face of the Kochs' investment history. Charles Koch, in particular, focuses on complex but little scrutinized industrial businesses that reap sizable returns. We're talking about fertilizers, asphalt, chemicals, and natural gas (Daniel Fisher at Forbes explains). The newspaper business is just the opposite: highly visible and barely profitable. Even using the LAT and Chicago Tribune as some sort of right-wing bully pulpit is a questionable strategy, considering how many other, louder voices are out there. If this were 1980, maybe, but not now. They could try to infuse their thinking onto the news pages, of course, but doing so would mean a loss of credibility among readers and advertisers. All of which is getting ahead of a story that might not amount to much, especially if you believe Tribune's claim that the papers have drawn lots of interest among other potential bidders. But let's just say that the Kochs, perhaps in conjunction with Doug Manchester, owner of the San Diego U-T, blew away all other offers. The Tribune board, which is made up of the company's old creditors, would probably want to cut a deal. And the truth is, the Koch brothers are not mass murders or drug smugglers - actually they are major philanthropists (the David H. Koch Foundation has funded cancer research and a number of arts and science organizations). This is the free market, and all else being equal, the guy who comes in with the highest price should be the guy who gets the big prize (as I pointed out a couple of weeks ago on KPCC). My gut tells me it's not going to happen (I wouldn't be surprised if their interest stirs up other possible buyers), but if the Kochs get it they get it. The world will not come to an end.

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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