Media General newspaper properties sold

No question about that.

 

Yep, it's all over. : As it has been every time an MG thread on here gets started. Let's see how it plays out, shall we?

 

Indeed. The only "industry analysts" insisting the Tribune will shut down are the ones who grace SportsJournalists.com with their presence.

Buyers are interested, and no one, with the possible exception of the crosstown rival Times, would drop big dollars just to shut it down. But the Times has significant money challenges right now, so the chances of that happening seem slim.

By many accounts, Halifax has a major woody for acquiring the Tribune.

 

As reformedhack has pointed out here before, the Tribune and Times markets are distinct, and while the Times' circulation in Tampa is significant (partly because of major price cuts on the product), the Tribune is still the paper of record for Hillsborough County. The Times' name change is trying to blur that line, but the Times does not appear to have the money to make a major push into Hillsborough or to purchase the Tribune. Most people believe the Tribune was not part of the purchase because of its economic woes, but that appears not to be the case.

http://www2.tbo.com/news/opinion/2012/may/18/namaino1-the-tampa-tribune-remains-dedicated-to-ou-ar-405051/

The size and scale of the Tribune's operations are too large for the model Berkshire Hathaway desired. Additionally, we are a more complex business than most newspapers because of the competitiveness of our market and our unique relationship with WFLA, News Channel 8.

Media General, which has been working to refinance its debt, continues to entertain offers for the Tribune, so we may eventually have new ownership. Media General remains solidly committed to the Tribune, should a deal not materialize.

 

Good analysis from Jack Shafer consistent with your second point:
http://blogs.reuters.com/jackshafer/2012/05/18/so-warren-buffett-likes-newspapers-again/

 

Thanks for the heads-up. Good read.

 

I don't wish a closing on anyone.

But if Buffett says that the size and scale of the Tampa paper is to large a model for Berkshire to handle he is being diplomatic. Berkshire has long owned the Buffalo paper and just bought the Omaha paper. Those are large metro dailies that are comparable in size to the Tampa paper. And Berkshire is a huge corporation with a lot of divisions. Berkshire could handle Tampa. Berkshire passed because they did not think they could make money in Tampa.

While I know that Tampa has integrated television and newsroom that has not stopped Media General from trying to sell it. After all, Media General said they are talking to other buyers.

 

"Our focus is on thought-provoking, relevant content that can only be found in Mother Trib"

Also known as writing new headlines on AP stories.

 

What I've always understood Buffett to have said is that he likes papers in communities that don't have a competitor in the market. Obviously, Tampa doesn't qualify by that standard.

 

My guess would be that even if the Tribune is sold, the partnership with WFLA would continue in some fashion, as many of the other papers in the state have partnerships with local TV stations.

 

That sort of slipped out in the "Town Meeting" us poor bastards in Florida had to sit through on Friday, when they mentioned Buffett likes papers that have a "monopoly" in their location, although they stuck to the official crap about Tampa being too big.

They also mentioned their desire to sell the Florida papers as a cluster (an appropriate word if there ever was one), didn't shoot down the rumor that the Times would like to buy the Trib for its equipment, subscriber lists, etc., and would then shut it down. Just said it was unlikely. We also got the spiel about it being business as usual, worry about what you can control and not what you can't, go out there and produce the best paper possible.....

 

The Philadelphia Inquirer just sold for 59M. The Tribune will sell for a lot less, of that I am sure. Media General is going to start 10+% interest on their debt. If they could have sold it for anything close to 59M they would have to pay debt down.

I don't know the circulation histories of the two papers but I bet if you add it up it is less than the paid circulation of the Times, which means that the Times has the press capacity to print both.

If the Times buys the Tribune for 30M, they could raise subscription prices. Weekday circulation of the Times is 300K. Let's say the Times raises subscription prices by $5 a month or $60 a year. That is an additional 18M a year. Combined subscriptions would drop but as long as the subscriber count of both papers stayed above 300K the Times would be able to pay off the purchase price in a couple of years.

That does not count the value of the Times building, which must count for something, or additional add revenues from the additional hits on the combined website.

There are reasons Buffett likes to invest in monopolies, not competitive situations. Monopolies are more profitable. And for the Tribune management to even broach the subject of a sale to the Times leads me to believe it is very much on the table.