Leonard Green Deal to Create Asian-Language Media Giant

In a nearly $255-million deal that creates one of the nation’s largest Asian- language media companies, a buyout firm is expected to announce today it is acquiring a stake in the Korea Times newspaper group and merging it with a Los Angeles broadcasting company.

The newly combined entity would own and operate 11 Korea Times newspapers in such cities as New York, Washington, Chicago and Atlanta; television stations in Los Angeles and Honolulu; and several AM radio stations.

The new firm, called AsianMedia Group, a merger of Korea Times and International Media Group, would be based in Los Angeles. It has plans to buy more television and radio stations nationwide, especially in the New York market. Leonard Green & Partners, the Los Angeles buyout firm, engineered the merger.

“The Asian broadcasting market is very fragmented,” said Peter Nolan, a partner with Leonard Green. “We plan to get national advertisers to recognize this market the way they have the Hispanic market.”

As part of the deal, Leonard Green will invest about $90 million in Korea Times, a family-owned entity with about 500 employees nationwide. That will give Leonard Green about a 50% stake in the firm. The other major stakeholder will be the Chang family, which owns Korea Times in Seoul.

The Korea Times operations in the U.S. will then buy L.A.-based IMG in a $165-million deal, leaving Green and Chang joint owners.

IMG owns KSCI-TV Channel 18 in Los Angeles and KIKU-TV Channel 20 in Hawaii, with about 60 employees combined, said Jon Yasuda, IMG president. They broadcast in Korean, Chinese, Vietnamese and Japanese.

“We believe that gathering all these Asian American groups together would create a compelling organization that will provide news as well as entertainment,” said Jae Min Chang, 51, publisher of Korea Times Los Angeles and head of U.S. operations here.

“With this merger, we can reach more into the other communities beside Korean,” he said.

Indeed. With the deal, Green could tap Korea Times’ established distribution channels in large markets such as New York and Washington and launch other Asian American media ventures there.

For Chang, the deal provides much-needed capital at a time when his flagship newspaper Korea Times Los Angeles and his television and radio ventures are losing ground to rivals in the highly competitive yet lucrative Southern California market.

There are 500,000 to 600,000 Korean Americans living in Southern California, the largest concentration outside Asia. Most are first-generation immigrants with strong language and family ties to South Korea.

Korea Times was one of the first Korean-language newspapers to be published in the U.S. in 1969 and enjoyed a dominant position in Southern California. (The Los Angeles Times has a business partnership with the Korea Times, in which Korea Times subscribers receive The Times on Sunday.) The success here prompted the family to branch out in other U.S. cities with a large Korean presence.

But in recent years, several competing newspapers have chipped at Korea Times’ dominance. Although Korea Times was able to keep some at bay--with one rival eventually folding--it has not been able to fend off a surge from Korea Central Daily News, also known as Joong-Ang-Ilbo.

With financial support from Samsung, the South Korean conglomerate, Korea Central Daily News has been able to rival Korea Times, according to Edward Chang, professor of ethnic studies at UC Riverside.

“Korea Times was the dominant paper, but after the L.A. riots in 1992 Korea Times ran into some financial difficulty, and Joong-Ang-Ilbo, supported by Samsung, put a lot of money into its operations,” Chang said. “They’ve increased the substance and quality of writing, so they are almost even now with Korea Times.”

Chang’s TV and radio ventures in Los Angeles also have encountered heavy competition. His television network, KTAN, and radio stations air programs about the same time as its rivals and compete heavily for advertising dollars, which is likely to have led to tighter margins.

“They are in tremendous debt right now. The move into television particularly cost them a lot of money,” said Chang of UC Riverside.

Jae Min Chang, who will head operations at the new company, is a long-standing member of the Korean community in Los Angeles. He moved to the U.S. as a teenager in 1966, and graduated from UCLA with a bachelor’s degree in economics in 1976.

He is no stranger to the media business. Chang’s father founded the parent publishing company in Seoul in 1954 and his older brother, Jae Ku Chang, ran the Los Angeles-based U.S. operation from 1969 until 1981.