April 9, 2021

The fight for Tribune Publishing between hedge fund Alden Global Capital and would-be white knight buyers Stewart Bainum Jr. and Hansjörg Wyss barely pauses for a between-rounds breather.

Here are some developments and perspectives for this week.

Bainum and Wyss have bid $680 million for the company, compared to Alden’s $635 million. A source familiar with Alden’s thinking offered this analogy (my paraphrase): Suppose you have your house on the market for $635,000 and have found a firm buyer. Someone else comes along and says, “I love your house; I’ll pay $680,000. But I’ll need to get an inspector in to check out the roof and wiring. And I want another guy to see about siting a pool and how much that would cost to install. I can do that over the next few weeks.”

Do you have a deal? Not really — and the next month will tell whether Bainum and Wyss, with their own financing in hand, decide to proceed to a final, legally binding offer.

A NewsGuild source accused me in an email of “naysaying” for raising this question along with whether interest-in-theory among wealthy potential buyers in Allentown, Orlando and other Tribune Publishing locations will translate into a sale. A month is a compressed time frame for individuals or local groups, rich or not, to assess what they are getting into by buying a paper out of a chain and taking on all elements of an independent operation.

To emphasize the positive — this effort has gotten way past what I thought possible at the end of 2020. At that point, Bainum had a tentative agreement to buy The Baltimore Sun for $65 million, but buyers for Tribune’s eight other metros were not on the horizon.

Remember that two investigative reporters (now former reporters) from the Chicago Tribune tramped around the city looking for a white knight to rescue the paper from Alden. They came up dry. Then early this year Swiss billionaire Wyss, who lives in Wyoming, contacted them. Now he is partnering with Bainum.

Prospects are falling in line in other cities, too, so the dream of saving Tribune Publishing from Alden’s clutches no longer looks implausible. Also Bainum and Wyss have the means, should they choose, to take the plunge without having certain buyers for other papers, gambling that deals come through later or running some of the orphan papers themselves.

NewsGuild chapters at Tribune titles held a virtual forum and rally Wednesday evening, aiming to make their case.

The organizer of the meeting, Jen Sheehan, a food writer at The Morning Call in Allentown and Guild chapter vice-chair, said that she particularly wanted to emphasize a point that came up in her local conversations. People, including prospective investors, know the industry is having financial problems, she told me, “but we’re still making money. Alden wants our money — that’s why they want to buy.” Skittish investors need reassurance that an owner who will settle for a low profit margin or no margin can make a go of it.

The forum included two members of Congress from Illinois, which raises a question of whether the fate of Tribune Publishing could kick helpful government action into gear. Several bills are already on the table to help the industry, including a potential subsidy for subscriptions.

Also, the prolific Steven Waldman tackled the question of how the government can help in a white paper last fall. He advocates “replanting” chain newspapers as independent and community-owned and proposes a series of tax breaks and investment structuring options that could make it happen.

That’s it for this week, but be prepared, as Sheehan put it, for another Sunday surprise. A higher bid from Alden? Or an added player for the Bainum-Wyss team? Or something else?

This piece originally appeared in The Poynter Report, our daily newsletter for everyone who cares about the media. Subscribe to The Poynter Report here.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
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