Beverly Hills, Calif.-based Platinum Equity sees a diamond in the rough in daily newspaper The San Diego Union-Tribune. The 14-year-old private equity firm is acquiring the publication for an undisclosed price from the Copley Press Inc. The acquisition for the firm, headed by billionaire investor Tom Gores, is the company's first venture in the newspaper industry, and many wonder: Will Platinum be able to bring some luster to the moribund paper others have left for dead?
Platinum will have its work cut out for itself because the paper, like many of its peers, is struggling to survive, suffering from lowered revenue on falling advertising and subscriptions as well as higher printing costs. The Union-Tribune's advertising has fallen 40% since 2006.
But Platinum principal Mark Barhill told The San Diego Union-Tribune: "There's no question that the newspaper industry is undergoing a period of tremendous upheaval, and we're not blind to that. ... But that said, we would not be making this acquisition if we were not confident about our ability to succeed in this business and in that market in particular."
Platinum is teaming with Canadian newspaper publisher David Black to revive the Union-Tribune. Changes will likely include "restructuring and severances," Black reportedly said. Now that the Union-Tribune is off the auction block, where it has been since July, industry watchers will likely be watching how Platinum's acquisition of the San Diego daily pans out. Should it succeed, look for other newspapers to be acquired; however, if the addition sours, look for the other publications on the auction block to continue to collect dust and, like the Seattle Post-Intelligencer, possibly look to shut down its printing presses. - Gerald Magpily
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