Tronc inherits $8 million cash prize in Daily News deal
Though the New York Daily News was sold for just $1 on Sunday, the new owner, Tronc, will inherit millions of dollars in cash as part of the deal.
The $8 million in "working capital" is part of a deal that includes significant costs, though: About $26.5 million in pension obligations, of which $2 million must be paid annually; $18.7 million in outstanding debt mostly tied to workers’ compensation and auto liabilities; and another $16 million in workers’ compensation and automobile insurance liabilities.
The details were spelled out in a recent disclosure filed with the Securities and Exchange Commission, which also lists big-ticket assets that the previous owner left behind for Tronc. Most notably, Tronc will receive the newspaper’s printing plant, in which $150 million was invested a decade ago, in addition to the $8 million in "working capital."
Tronc bought the New York Daily News from publisher Mortimer B. Zuckerman, who purchased it for $36 million in 1993.
Tronc also owns the Los Angeles Times and the Chicago Tribune, among other daily newspapers. The tabloid, which has been depleted by a decades-long war with the rival New York Post, gives Tronc an entrée to a huge U.S. media market that may help the company lure national advertisers.
The Daily News was established in 1919 and has become a mainstay in the city, racking up 11 Pulitzer Prizes and four finalist nods.
As part of the arrangement, Tronc “will acquire a 49.9 percent interest in a joint venture with Zuckerman-related entities that will own the 25-acre parcel of land on which the printing facility is located and which overlooks the Manhattan skyline,” Tronc wrote in a statement.
The Daily News is leasing from the New Jersey Economic Development Authority the 25-acre parcel that houses the newspaper’s printing facilities.
Under that lease agreement, the Daily News is required to buy the land by 2021 for up to $7 million.
However, the cost to Tronc could be knocked in half, to about $3.5 million, as part of a joint venture with Zuckerman-related entities, which would own the land and then lease it to the Daily News for $1 per year.