Dec 7, 2008

All for one

Martin Peers of the Wall Street Journal thinks mass consolidation is needed for newspaper companies to keep bankruptcy at bay:

...The cash deals of recent years saddled many newspaper chains with too much debt, exacerbating today's problems. But the industry is still too fragmented. The biggest publisher, Gannett, accounts for 13.6% of daily circulation. Tribune accounts for 5.3%. Combinations would allow companies to save on corporate overhead and information-technology costs, which account for as much as 6% to 7% of revenues. The latter are particularly important as newspapers ramp up spending to expand their Web sites.

One logical combination is a merger of MediaNews, Freedom and Lee. These companies have geographic overlap in some of their properties, which would allow efficiencies in printing and distribution. MediaNews and Freedom overlap in Southern California -- MediaNews owns the L.A. Daily News while Freedom has the Orange County Register -- and in Colorado.

I'm not sure about Lee, but a Freedom-MediaNews marriage isn't too far fetched. And so what does Peers think should happen with Tribune Co.?

Meanwhile, Tribune could be broken up and its properties combined on a more geographically logical basis. Its Los Angeles Times would fit well with a MediaNews-Freedom-Lee combination, allowing it to dominate Southern California. Its Florida papers might make more sense with McClatchy, which owns the Miami Herald. Regulators might be more accepting of such deals in the current climate.

MediaNews buys the LA Times? You've blown my mind - and the mind of every current and former Singleton reporter who ever harbored a giddy hope that one day the mighty Times would take notice and call you up to the show.

1 comment:

George said...

The thought of Media News taking over the LA Times makes a nightmare horror movie, but it won't happen. Media News has bigger financial troubles and the debtholders won't be so charitable with Media News.

Zell has some leverage because there is real estate involved and the lenders knew - or should have known - what they were getting into since that deal was more recent.