"Gannett Co. on Monday went public with its proposal to acquire Tribune Publishing Co. in a deal valued at about $400 million that would combine titles like USA Today, the Los Angeles Times and Chicago Tribune, as the struggling newspaper industry increasingly consolidates.
Gannett is offering $12.25 in cash for each share of Tribune, a 63% premium to the stock’s closing price Friday. Including the assumption of Tribune’s debt, Gannett said the deal has a total value of $815 million." (The Wall Street Journal)
The report of the offer caused a war of words between Tribune Publishing and Gannett Co.
"I believe 100 percent in my heart that this is completely a manipulation, that they're trying to steal the company, bum-rush us," he said in the Tuesday interview. "It is ungentlemanly, it is not what we do in this industry. It is not the way we do business." (Tribune Chairman Michael Ferro/Chicago Tribune)
Gannett CEO Robert Dickey fired back that all he wants "is a substantive response to our proposal" and an opportunity to meet...
...Dickey on Monday accused Tribune Publishing Chairman Michael Ferro and Dearborn of stalling, saying they had been trying to "delay constructive engagement" over the proposed deal by putting off consideration of it until later in the year. (Chicago Tribune)
There is only one "substantive response" to Gannett Co. "No." Not just no, but never. Never is a long, long time.
There are good solid business reasons for the Tribune Publishing Board to take the deal. The shareholders will benefit. Michael Ferro will walk away with a very tidy deca-million profit, as will other major investors.
There are good solid journalism reasons for the Tribune Board to reject the deal.
Tribune Publishing owns a legacy newspaper, the Chicago Tribune. The Chicago Tribune was established in 1847. Though it was started as a newspaper, it made its initial profits from the printing business. The paper and other print material were put out by horse powered presses.
The Chicago Tribune is part and parcel of the history of Chicago. It is Chicago's hometown newspaper. If Chicago is the most American of American cities, the Chicago Tribune is the most American of American newspapers. It should not be sold to out of town interlopers, predators, and usurpers like Gannett.
The Chicago Tribune survived many business battles in a newspaper town that saw most papers fold. Its most famous battle was with the Hearst organization. This was a literal war with blood spilled. Both sides employed gangsters to assist them in their quest for dominance. Even Al Capone stated that the newspaper wars were some of the worst he fought.
It was ugly, brutal, and the Tribune walked away victorious against William Randolph Hearst.
The Chicago Tribune faced financial ups and downs through its various majority owners of the past several decades. But one thing remained consistent. The journalism never suffered.
The news business is tough, especially in the Digital Age. Since papers became corporate and worse, public corporations, there has been a continuing war between the newsroom and the corporate suits or bean counters. Traditional newspapers were slow to catch the digital wave. They were, after all, in the printing business.
Monetizing a newspaper for digital and print is difficult, especially in a stagnant economy. News is a business. The purpose- not the reason- for a business is to earn maximum profits at minimal costs.
The purpose of journalism is to inform the public and be their watchdog. For a local news entity it also means a certain amount of boosterism.
The Chicago Tribune does this well. It is a balanced publication covering local, national, and international news. It includes contributions from reliable news companies like the Washington Post and Bloomberg. The Tribune is also an unabashed booster of Chicago and part of the city's civic fabric.
As a watchdog it has more bite than bark. Credit is given where it is due. Discredit is given where it is deserved.
When Michael Ferro bought the Chicago Sun-Times, he was like as a big kid at Christmas with a shiny new toy. He could not wait to play with it but he did not read the directions.
He learned an important lesson. He matured in the news business. He was a more sober minded adult when he took the reins of the Chicago Tribune. He also learned there is a culture in the news business and in each newsroom. He had to learn this and become part of it. So far, at the Tribune, he is learning and trying to fit in.
Selling Tribune Publishing to Gannett would spell disaster for the Chicago Tribune. Gannett owns U.S.A. Today. It is Gannett's flagship news entity. The Chicago Tribune would be reduced to U.S.A. Today lite. Gannett is known for ruthless cost cutting and staff shrinkage when it takes over news organizations.
Aside from its quality news coverage, the Chicago Tribune probably has the best photojournalism coverage in the country, especially online. That would probably go in the first round of Gannett cost cutting.
Michael Ferro has a great opportunity make Tribune Publishing a viable and competitive enterprise in the news business. He has a greater opportunity to maintain the legacy of Chicago's hometown newspaper and one of the nation's great newspapers.
Selling to Gannett would destroy that legacy. The Chicago Tribune would be reduced to a shameless click bait tabloid.
There is only one answer to Gannett. No. Not today. Not tomorrow. Not ever.
The opinions and views expressed in this piece are the author's own. They do not reflect the views and opinions of ChicagoNow, Tribune Publishing, or the Chicago Tribune.
Filed under: Uncategorized