Tampa Bay Times' CEO on refinancing debt and accepting money from anonymous lenders
Last week, the Tampa Bay Times Company (which Poynter owns) made a big announcement: With help from a local group of lenders, the company refinanced an outstanding $18 million loan from Crystal Financial, a Boston-based financial firm.
Under the banner "FBN Partners" (a nod to "Florida's Best Newspaper," The Times' longtime slogan), the eight locals loaned the Tampa Bay Times Company $12 million. The company also secured a loan from Encina Business Credit of Chicago for up to $20 million, but the company has not used the full amount. The Encina loan was secured using Poynter's assets as collateral.
In addition to paying off Crystal Financial, the Times made contributions to its pension plan and added some working capital for corporate purposes.
The arrangement is an unconventional one among U.S. metropolitan newspapers, most of which are satellite outposts of faraway news corporations. Of the eight local lenders to The Tampa Bay Times, only four were named in a column by Paul Tash, the chairman and CEO of the Tampa Bay Times Company. Tash and his wife, Karyn, are among the named investors, along with three other philanthropists and business executives.
Tash described the other lenders as individuals that have made "big investments in the Tampa Bay region" and omitted their names in his column. "The Times would be pleased to name them all, but will honor their individual preferences," Tash wrote.
The decision to grant anonymity to the lenders struck me as interesting, particularly given the 2015 mystery purchase of the Las Vegas Review-Journal (later revealed to have been orchestrated by GOP mega-donor Sheldon Adelson). Although the two situations are vastly different — Tash spelled out in his column that the lenders would have no equity, exercise no control over news content and were motivated by a desire to preserve local ownership — entering into a financial arrangement with anonymous, deep-pocketed individuals is a departure from business as usual at The Tampa Bay Times.
I asked Tash if he would talk to Poynter about the decision, and he agreed to an on-the-record question-and-answer session. Below is a transcript of our conversation.
Who are the four anonymous lenders in FBN Partners?
There are four partners of the eight who have decided to remain anonymous. And I'm going to keep them that way.
Why did you decide to do that?
A, because they asked. And B, because I know who they are, and I know the character of these individuals. And because it was important to them.
Do you plan to name the named lenders in news coverage?
I already have.
But say you guys do a follow-up story that happens to involve one of the people that lent the paper money. Will you disclose in your coverage that they have lent the paper money?
It would depend on the length of the coverage. If it was a digest item, maybe not. But I would think, by and large, it would be up to the newsroom.
Because there are unnamed lenders, you don't have the same ability to do that for the lenders you haven't identified. Do you see a problem with that inconsistency?
I don't. Each investor had a choice. I encouraged all of them to be forthcoming — even beyond their own comfort, sometimes — which is how we wound up with the four of us. But these are not people who seek public attention or credit for what they're doing. And some of their reticence is modesty.
You mention in your column that these lenders won't have any sway over news coverage. How can you make that assurance?
One, I make that assurance because it's true. Two, the documents themselves say this. Three, this is not the only financial relationship where we cover the other party. For example, one of our biggest advertisers is Publix Supermarkets. We write stories about Publix all the time. We have important relationships around the Tampa Bay area with other advertisers. Last year, there were a couple of big furniture retailers who were sued by customers over the quality of the upholstery in the furniture that those customers bought. We covered that story. I'm sure that the furniture retailers would have preferred we didn't. But we covered them.
So yes, there are all kinds of relationships in the world, and you cover the people regardless of the relationship.
The difference, though, is those financial relationships are explicit. The newsroom presumably knows who's advertising in the newspaper, and they can make the appropriate disclosures if they want to. But with this, you've put the newsroom in a position where, in some cases, they won't know whether or not there's a relationship. So I feel like those two situations aren't exactly parallel.
Maybe. That's your judgment to draw, Ben. I'm not going to say who the investors are, whether we'd be likely to be covering them or their interests or not. But it's not unusual to be writing about people that have a financial relationship with the news organization.
Do you think you're more or less likely to take calls from these people that are lending if they find some coverage objectionable?
I take calls from everybody. I'm very open to everybody. I'm open to advertisers who call. That's not because they're advertisers. It's because if somebody's got a beef about coverage, it's our job to hear it and decide what we make of it. It doesn't always mean that there's going to be satisfaction. But I take calls from all kinds of people who have some beef about coverage.
You've now refinanced the loan on better terms. Do you have reason to believe that The Times will be in a better position post-refinancing? I guess my question is, is this refinancing just kicking the can down the road? Or do you have reason to believe The Times company can actually climb its way out of this debt?
Oh, I know it can. I know that based upon the results, as I described in my column the other day, over the last nine months. And what a huge difference it makes versus the same time a year ago. Moreover, these are sophisticated individuals. This is a sophisticated commercial lender that has come in alongside them. These are not people who are unable to make their own judgments about financial projections and probabilities.
So, if I thought that, I would not have put in a sizable share of my own fortune.
Is the Tampa Bay Times Company a profitable enterprise?
(Laugh) Well, that's as it should be, I guess.
As I tell my younger colleagues, including you, it's too bad you missed the 1980s, you would've liked them. But it is a sound and profitable enterprise.
If you could go back in time, would you still buy the Tampa Tribune and close it?
Yes. I would. With perfect hindsight, I might've done a few things around that a little differently. But I absolutely still would have bought the Tampa Tribune and merged its customer base with The Times customer base. I think that was an essential move for the economics of newspapering in the Tampa Bay region.
Have you trimmed staff from the newsroom of The Tampa Bay Times?
Initially, when we merged with the Tribune, we went up some, and now we're back down. But we have still retained a number of former Tribune staff members. Far and away, The Tampa Bay Times is the largest news organization, both in terms of audience and in terms of staff serving that audience in the state of Florida.
Is there anything else you'd like to add?
The one other point I'd make is one I made in the column, which is that, for these individuals, this is an investment in the business, but it's also an investment in the Tampa Bay community. Because they recognize that what Nelson Poynter left this region 40 years ago is a jewel. And that while the business has certainly changed, and it's a different business than it was 40 years ago, the Times still has a rich and vibrant connection with the Tampa Bay region that is unlike that in most American cities and therefore plays a much more vigorous role in the Tampa Bay area. So if this were just any other newspaper, this deal doesn't happen.
And even the commercial lender who comes in as well, Encina Business Credit, is attracted because it recognizes that The Times — their words, not mine — is a world-class newspaper.
That's great. I think those are all my questions. Thanks for taking the time.