From: New York Times
By AMY CHOZICK
Published: April 20, 2013
Tannen Maury/European Pressphoto Agency
Tribune’s newspapers, including The Chicago Tribune, have caught the interest of a number of suitors.
Three years ago, Charles and David Koch, the billionaire industrialists
and supporters of libertarian causes, held a seminar of like-minded,
wealthy political donors at the St. Regis Resort in Aspen, Colo. They
laid out a three-pronged, 10-year strategy to shift the country toward a
smaller government with less regulation and taxes.
Kevork Djansezian/Getty Images
The Los Angeles Times is the fourth-largest paper in the country.
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The first two pieces of the strategy — educating grass-roots activists
and influencing politics — were not surprising, given the money they
have given to policy institutes and political action groups. But the
third one was: media.
Other than financing a few fringe libertarian publications, the Kochs
have mostly avoided media investments. Now, Koch Industries, the
sprawling private company of which Charles G. Koch serves as chairman and chief executive, is exploring a bid to buy the Tribune Company’s
eight regional newspapers, including The Los Angeles Times, The Chicago
Tribune, The Baltimore Sun, The Orlando Sentinel and The Hartford
Courant.
By early May, the Tribune Company is expected to send financial data to
serious suitors in what will be among the largest sales of newspapers by
circulation in the country. Koch Industries is among those interested,
said several people with direct knowledge of the sale who spoke on the
condition they not be named. Tribune emerged from bankruptcy on Dec. 31
and has hired JPMorgan Chase and Evercore Partners to sell its print
properties.
The papers, valued at roughly $623 million, would be a financially
diminutive deal for Koch Industries, the energy and manufacturing
conglomerate based in Wichita, Kan., with annual revenue of about $115
billion.
Politically, however, the papers could serve as a broader platform for
the Kochs’ laissez-faire ideas. The Los Angeles Times is the
fourth-largest paper in the country, and The Tribune is No. 9, and
others are in several battleground states, including two of the largest
newspapers in Florida, The Orlando Sentinel and The Sun Sentinel in Fort
Lauderdale. A deal could include Hoy, the second-largest
Spanish-language daily newspaper, which speaks to the pivotal Hispanic
demographic.
One person who attended the Aspen seminar who spoke on the condition of
anonymity described the strategy as follows: “It was never ‘How do we
destroy the other side?’ ”
“It was ‘How do we make sure our voice is being heard?’ ”
Guests at the Aspen seminar included Philip F. Anschutz, the Republican
oil mogul who owns the companies that publish The Washington Examiner,
The Oklahoman and The Weekly Standard, and the hedge fund executive Paul
E. Singer, who sits on the board of the political magazine Commentary.
Attendees were asked not to discuss details about the seminar with the
press.
A person who has attended other Koch Industries seminars, which have
taken place since 2003, says Charles and David Koch have never said they
want to take over newspapers or other large media outlets, but they
often say “they see the conservative voice as not being well
represented.” The Kochs plan to host another conference at the end of
the month, in Palm Springs, Calif.
At this early stage, the thinking inside the Tribune Company, the people
close to the deal said, is that Koch Industries could prove the most
appealing buyer. Others interested, including a group of wealthy Los
Angeles residents led by the billionaire Eli Broad
and Ronald W. Burkle, both prominent Democratic donors, and Rupert
Murdoch’s News Corporation, would prefer to buy only The Los Angeles
Times.
The Tribune Company has signaled it prefers to sell all eight papers and
their back-office operations as a bundle. (Tribune, a $7 billion media
company that also owns 23 television stations, could also decide to keep
the papers if they do not attract a high enough offer.)
Koch Industries is one of the largest sponsors of libertarian causes —
including the financing of policy groups like the Cato Institute in
Washington and the formation of Americans for Prosperity, the political
action group that helped galvanize Tea Party organizations and their causes. The company has said it has no direct link to the Tea Party.
This month a Koch representative contacted Eddy W. Hartenstein,
publisher and chief executive of The Los Angeles Times, to discuss a
bid, according to a person briefed on the conversation who spoke on the
condition of anonymity because the conversation was private. Mr.
Hartenstein declined to comment.
Koch Industries recently brought on Angela Redding, a consultant based
in Salt Lake City, to analyze the media environment and assess
opportunities. Ms. Redding, who previously worked at the Charles G. Koch
Charitable Foundation, did not respond to requests for comment.
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