To Media General, Tampa Tribune's become 'discontinued operation' until sold
Wake up and good morning. Will the Tampa Tribune newspaper have a new owner before the end of this year? The shrinking paper was recently orphaned by longtime owner Media General after the Richmond, Va., parent company sold all of its newspapers to billionaire Warren Buffett. Except the Tribune. Curious.
Now, says Media General CEO Marshall Morton (photo, left), the paper is being looked at by other potential buyers. "We're in discussions with prospective buyers for our Tampa print properties and associated web sites, and we believe the sale of these properties is probable, although we can't provide a definitive timetable today," Morton told analysts in an earnings conference call Wednesday. Read the entire transcript of that discussion here.
Media General in May agreed to sell its 63 weekly and daily papers (minus the Trib) across the Southeast to Buffett's Berkshire Hathaway for $142 million -- or less than $2.3 million per paper on average. Debt-strapped Media General also got a much needed $400 million term loan and $45 million credit line in the deal. Here's the Tampa Tribune's coverage today. Media General retained its WFLA Channel 8 television station in Tampa, part of the company's new strategy aimed at investors to become a "pure play" television broadcaster.
Oddly, Morton told analysts that the Republican National Convention coming to Tampa, of all places, will provide Media General with "unique opportunities for news coverage." Morton cited some "event apps" that will help conventioneers get around town. "News apps" and web sites will generate digital revenues, he said. "These sales showcase the value of our markets and brands," he added.
It's unusual timing to be talking about branding opportunities in Tampa at the same time Media General's peddling the Tampa Tribune to others.
Analysts asked Morton whether the Tribune was generating positive cash flow yet. They assumed that was not the case when Morton declined a specific answer. Morton did say that the Tampa market is improving. "You'll hear that from everybody form the Chamber of Commerce to the governor down there, and that's true," Morton said.
Wells Fargo Securities analyst Bishop Cheen asked Morton if Media General would have to keep pouring cash into the Tampa Tribune to keep it operational while it is up for sale. "I know you're doing everything you can to land Tampa safely and advantageously to Media General," Cheen said.
Media General acknowledged it would support the Tribune, but noted the newspaper has been set aside for accounting purposes as a "discontinued operation" or one being held for sale.
In his story, Trib reporter Richard Mullins asked media analyst Edward Atorino of The Benchmark Co.: Who's likely to buy the Tribune? His answer: Either a private equity firm looking for a good investment or a wealthy individual with pockets deep enough to rise out the financial pressures on the newspaper industry.
Clearly Halifax Media, based in Daytona Beach and majority owned by Arkansas private equity firm Stephens Capital Partners, has been on a tear in Florida buying dozens of small-to=did-sized newspapers. Would it consider the Tribune if it was cheaply priced?
The Tribune, of course, is a direct regional competitor with the larger Tampa Bay Times -- my employer and the largest newspaper in Florida and the southeastern United States. It's going to be an interesting year...
-- Robert Trigaux, business columnist, Tampa Bay Times