Cooke’s Estate Puts Daily News Up for Sale

Jack Kent Cooke’s estate has put the Los Angeles Daily News up for sale, and while its current publisher said he’d like to buy it, analysts said a bigger media company is more likely to wind up owning the Woodland Hills-based newspaper.

Daily News Chief Executive and Publisher Larry T. Beasley, hired by Cooke three years ago, said Thursday that “certainly I’d always be interested [in buying it]. I think it’s a wonderful paper with great people. But it remains to be seen what takes place.”

Newspaper analyst John Morton of Morton Research in Spencerville, Md., said there are financial obstacles in Beasley’s way.

“It’s very difficult for a private group to do that,” Morton said. “It’s tough to meet the price that a larger company is willing to pay.”

Morton cited Freedom Communications, owner of the Orange County Register, and William Dean Singleton’s MediaNews Group as “the two most logical buyers.” Singleton owns the Denver Post and newspapers in 11 states, including papers in Pasadena and Whittier.

Jim Rosse, Freedom’s chief executive, said: “I doubt we’d have any interest. . . . We are not particularly interested in increasing our investments in California.”

Singleton did not return calls seeking comment.

The Cooke family hired Dirks, Van Essen & Associates in Santa Fe, N.M., to handle the sale. Lee Dirks, president of the concern, said “several parties would be interested” in buying the Daily News, and he expects a sale to be completed in a few months.

Morton said he was sure the Daily News is now profitable and that it might sell for less than $200 million. That would be somewhat lower than the typical 10 to 12 times the operating cash flow paid to buy a newspaper, he added.

The Cooke family probably faces the loss of “$100 million or something like that” on the Daily News sale, Morton said.

Morton noted there is intense competition in the Southern California newspaper business and that the Los Angeles Times, owned by Times Mirror Co., is the Daily News’ chief competition.

Cooke, who died in April at the age of 84, had holdings that included the Washington Redskins football team and the art deco Chrysler Building in Manhattan. Newspapers were an early love for Cooke, and he made his first fortune by buying and selling papers and radio stations in Canada.

In 1985, Cooke paid $176 million to buy the Daily News from Tribune Co., or a whopping 44 times the paper’s 1985 profit. Cooke then invested heavily in a new printing plant.

Three years ago, when the Daily News was only marginally profitable, Morton said, Cooke put the paper up for sale. One newspaper executive said there was speculation then that Cooke might sell the Daily News for $120 million.

But Cooke hated to lose money on any investment and, after more than a year, took the paper off the market.

Cooke was pleased with Beasley’s performance running the paper, Morton said. It also helped that newsprint prices have dropped and that the local economy has revived and has probably boosted the Daily News’ ad revenues, one newspaper executive said.