Tuesday, October 16, 2018
Business

Tampa Bay Times completes refinancing with help from local investors

Four decades ago, a man named Nelson Poynter gave away this newspaper to protect its independence and local ownership. In that same spirit, a group of local investors is stepping forward with a loan of $12 million, part of a larger refinancing by the Times company.

The investor group, FBN Partners, has taken a mortgage on the buildings and 27 acres of land at the newspaper's printing facilities in central St. Petersburg. FBN stands for "Florida's Best Newspaper," the Times slogan going back to the days of Nelson Poynter.

The investors are drawn both by the interest on the loan and the chance to support the structure that Mr. Poynter created to keep the Tampa Bay Times from being acquired by a chain with headquarters somewhere else.

"Having a hometown newspaper is tremendously important to our region," said Frank Morsani, a business executive and philanthropist. "I'm not sure that people around Tampa Bay realize how lucky we are."

Morsani and his wife, Carol, have taken one of eight shares in the partnership. So have Ted Couch, Tampa developer and philanthropist, and Robert Rothman, chairman of a Tampa investment company and part owner of the Washington Redskins.

So have I, along with my wife, Karyn, a sign of our commitment to the Times and confidence in its future.

Some of the investors decline to be identified publicly, but all have big investments in the Tampa Bay region. Several have made huge charitable contributions to local institutions. The Times would be pleased to name them all, but will honor their individual preferences.

The loan does not give the investors a stake in the Times' ownership, or a say in the Times' news coverage or editorial commentary.

The group could grow by two more investors, which would bring the total loan to $15 million, where it is capped. The loan is for five years. The group is represented by Directed Capital, a real estate investment firm based in St. Petersburg.

The other part of the company's refinancing comes from Encina Business Credit in Chicago, for a maximum of $20 million. That loan is secured by the company's other assets — except the printing plant — plus the real estate at the Poynter Institute, which owns the Times.

"The Times has a long history of running a world class newspaper," said Bill Kearney, senior managing director of Encina Business Credit. "This is a good example of the type of financing Encina was established to provide, and we look forward to helping the management team execute their business plan."

The refinancing comes just over a year after the Times bought the Tampa Tribune and brought those customers into the Times' own operations. In a divided market, turning a profit was a tall order for both the Times and the Tribune. The first four months after the combination were rough, too, with more new expenses than revenues.

But we adjusted to the circumstances we found. Starting last fall, the Times has shown substantially improved financial results and consistent operating profits. Newspaper publishing is not an easy business, but it can be a sound one.

This refinancing is a major step along that road for the Times. The injection of new money lets us replace the lender that financed the purchase of the Tribune, make contributions to our pension plan and add fresh working capital for the company's operations. Both loans carry lower interest rates than we have been paying to our previous lender.

Beyond the financial benefits, the refinancing shows a commitment from several leading citizens to the Times and the role it plays in the civic life of Tampa Bay. Born in the back of a drugstore in 1884, the Times has become one of the 10 biggest newspapers in the country, and in Florida, it is the biggest by far.

It is also the only big Florida newspaper where the company CEO wakes in the morning to read his own local newspaper, where his wife teaches in the public high school, and where his daughters have come back from college to start their own careers. When I make a speech at a Rotary Club or Chamber of Commerce, I don't fly in from another state. Sometimes I can walk.

Unlike many other American cities, the Times' roots still run deep throughout the Tampa Bay region, thanks in part to those who have watered them today. Those investors can expect a nice return on their investment. So can everyone else who calls Tampa Bay home.

Paul Tash is the chairman and CEO of the Tampa Bay Times and the Times Publishing Co.

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