Back in 2007, when Sam Zell was swooping in to buy the Tribune Company, Eli Broad was mentioned as a possible last-minute bidder for its flagship paper, the Los Angeles Times. Now, as Tribune files for bankruptcy, the billionaire founder of KB Homes and SunAmerica is talking again about a possible LAT purchase.
At a lecture on business and philanthropy in New York City last night, Broad discussed how a deal might be structured if the paper is put up for sale as part of the bankruptcy proceedings. "I would like to see our foundation and others join together to own the LA Times," he said, adding "we can't afford to lose good newspaper journalism, investigative reporting." He said the new owners would have to be comfortable with the idea that it is highly unlikely the paper would ever generate the profits it once did. He also said that the LAT couldn't survive as a national newspaper, but that it could possibly partner with other papers like the Washington Post (NYSE: WPO) to piece together national coverage.
The LA Times was part of the Times Mirror newspaper empire before Tribune bought the chain in 2000 for about $8 billion. Tribune was taken private by real-estate tycoon Sam Zell in 2007 as part of a $8.2 billion, debt-laden deal. The company filed for bankruptcy in December as it strained to pay off that debt.
"No one has figured out a good business model as of yet," Broad said of the newspaper industry. "Newspapers ought to be owned by foundations, not look for great financial returns."
By Rory Maher