San Diego paper may be sold
Pressed by newspaper industry woes and plummeting real estate advertising, the parent company of the San Diego Union-Tribune said Thursday that it may put itself up for sale.
Copley Press Inc., which also owns the biweekly Borrego Sun in Borrego Springs, Calif., said it hired New York’s Evercore Partners to explore possible deals, including a sale.
“The last couple of years have been a difficult period for the newspaper industry, especially those in a real estate-dependent market like San Diego,” said Harold W. Fuson, executive vice president of the La Jolla company. “We have every reason to believe the business will rebound with the economy, but the uncertainties pose too great a risk to sit still.”
The outlook has been bleak throughout the newspaper industry, as the weak economy and an exodus of advertisers to the Internet have cut into profits, accompanied by declines in readership and sales. Over the last week, a host of newspaper publishers have announced lower profits and double-digit declines in ad revenue.
Even so, the move by privately owned Copley Press was a surprise to many observers because the publisher had been selling off other assets to provide a financial cushion for its flagship newspaper. The Union-Tribune is the nation’s 21st-largest daily newspaper, with a circulation of more than 300,000 on weekdays and more than 350,000 on Sundays.
In May, the company sold its news service for an undisclosed price, and last December it announced plans to sell La Casa del Zorro, a Borrego Springs resort it has owned for nearly five decades. Previously, Copley Press sold its suburban Chicago weekly papers and the Daily Breeze in Torrance.
“It’s not clear why they needed to sell” the remaining company, said Mike Simonton, a media analyst with Fitch Ratings in Chicago. But given the industry’s dour outlook, he added, “someone could have thought that even selling at today’s distressed prices might be better than what they might get in the future.”
Potential buyers could be hard to find among financial investors and debt-laden newspaper chains, Simonton said. A wealthy local investor could emerge, but it’s unclear whether banks bitten by the mortgage crisis would help finance a newspaper purchase.
The Union-Tribune has 1,241 employees after job cuts this year.