Can Billionaires and Newspapers Mix?
With declining circulations and dwindling advertising revenues, newspaper companies have been struggling for years. As their stock prices have come under pressure, shareholders have pressed for some companies to be broken up. In the crosshairs this year is Tribune Co. (TRB), owner of the Chicago Tribune, Los Angeles Times, and Newsday, as well as the Chicago Cubs baseball team (see BusinessWeek.com, 7/13/06, “The Real Story at Tribune”). The result is that, after 40 years of big, publicly traded companies such as Tribune and Gannett (GCI) leading consolidation in the industry by buying up small papers, the industry looks like it’s headed toward a new era in ownership. A new breed of wealthy businessmen—including ex-General Electric (GE) CEO Jack Welch, billionaires Eli Broad and Ronald Burkle, and DreamWorks co-founder David Geffen—are looking over the books of struggling companies as they consider buying marquee newspapers, such as the Los Angeles Times and The Boston Globe. Most rece
