TAMPA — The California-based private equity firm that bought the Tampa Tribune paid $9.5 million for the newspaper and its affiliates, even though the land, building and equipment at the Tribune's headquarters have values estimated at a combined $10.7 million.
Meanwhile, Media General disclosed in a regulatory filing Tuesday that it is writing off nearly $25 million in selling the Tribune, its last major newspaper holding. The Richmond, Va., media conglomerate had previously recorded an estimated $18 million after-tax loss in anticipation of the sale. But Tuesday, it said it will record an additional loss of between $6 million and $7 million.
The deal was a double win for Los Angeles-based Revolution Capital Group: Media General held on to shouldering pension liabilities for the paper while Revolution Capital receives millions of dollars worth of real estate and equipment at the newspaper's building on S Parker Street.
In addition to the Tribune and TBO, Revolution Capital on Monday became the new owner of Hernando Today, Highlands Today, Suncoast News, Sunbelt Newspapers and the Spanish-language publication Centro. Along with those business operations, which include 618 employees, Revolution received assets whose estimated values add up to nearly $10.7 million, according to Hillsborough County Property Appraiser's assessments:
• The newspaper building at 202 S Parker St. has a depreciated value of $935,000.
• The Tribune owns tangible property — technology, printing presses and equipment — at 202 S Parker St. valued at $6.4 million.
• The newspaper has $855,000 more in equipment next door at the News Center, the home of NBC affiliate WFLA-Ch. 8. Media General is keeping the TV station as part of a plan to become purely a broadcasting company, and the Tribune will move the staff of the newspaper and website from the News Center back into the old building.
• The sale also includes the land at 202 S Parker. The property appraiser's assessment values that property together with the News Center property. Combined, those parcels cover 5.8 acres and have a value of $3.7 million. Media General is seeking city approval to split the parcels. The land occupied by the old Tribune building fills about two-thirds of the total site, yielding a rough estimate of $2.5 million for that parcel.
Media General kept a parking garage just across the street from the Tribune building, though publisher William Barker said the ability of newspaper employees to park there will not change.
Lou Anne J. Nabhan, Media General's vice president for corporate communications, said Media General has retained the pension assets and liabilities for all employees of the Tampa group as well as for all of the other newspapers sold to Berkshire Hathaway in June.
"Employees and retirees have no cause for concern," she said.
In announcing the sale, Revolution founder and managing partner Robert Loring said the new owners are committed to growing the business. "We are definitely in this for the long haul," he told a Tribune reporter. "We don't flip businesses."
Media General said the purchase price was subject to adjustments for working capital and other items. As a result, the net proceeds of the sale to Media General are estimated to be about $2 million before expenses.
On Tuesday, Barker described the working capital as "the capital we have to work with, to run the business with," but he said he could not say what period of time it will cover.
Revolution Capital set up a Florida corporation, Tampa Media Group, to run the newspaper. Tampa Media Group's president and secretary is Cyrus Nikou, Revolution Capital's co-founder.
During a meeting with Tribune staff Monday, one of the new owners would not address staffing levels at the paper. Barker told employees that benefits and salaries will not change for the rest of this year.
On Tuesday, Barker said he couldn't predict what changes may occur or what happens after the first of next year.
"Change in this business is inevitable," he said. Going from Media General, a publicly traded company that must respond to shareholder demands, to a privately held ownership group "allows us not to be encumbered by distractions, and allows us to be purely focused on our readers, and that's what's important," he said.