Management at Herald Works on Buyout Plan

The top executive at the Los Angeles Herald Examiner said Wednesday that he is working on a proposal for a management-led buyout of the paper by a group that would include employees.

“I think it’s a long shot,” said John J. McCabe, the paper’s chief operating executive, who began to outline the proposal on Tuesday. “We have to develop a strategic plan and ascertain if there would be equity funding available.”

McCabe said the paper’s owner, New York-based Hearst Corp., last week gave him the go-ahead to put together a buyout proposal. McCabe said he approached Hearst management with his idea several weeks ago, after officials from the Toronto Sun and oil tycoon Marvin Davis had separately shown an interest in the daily paper but then decided against buying it.

“What is implicit is that the paper is up for sale,” said McCabe, who has worked at the Herald since 1983. “Hearst would not have people taking a look at the paper if it was not up for sale.”

Hearst officials were not available for comment.

McCabe, who announced his plans to a group of the paper’s editors Wednesday afternoon, said his proposal would be based on converting the 242,000-circulation daily to a tabloid format. “That would give us an opportunity to find that niche that we have not found in our marketplace,” he said.

McCabe stressed the plan is risky. “It would take several years to turn it around,” he said. “The big ‘if’ is if there is funding out there to support such an endeavor.”

The financing search will begin after the strategic plan is done, probably by the end of May, McCabe said. Hearst has not set a deadline for submitting the plan, he said.

Although he gave no details, McCabe said all employees of the paper, not just top managers, would be allowed to participate in the buyout.