The 117-year-old daily Tampa Tribune newspaper was sold Monday to a 3-year-old private equity firm in California whose still-untested portfolio of companies consists of just three: a maker of bows and ribbons, a provider of medical apparel and an operator of a deals database used by financial institutions.
According to the Tampa Tribune, longtime Tribune owner Media General of Richmond, Va., received multiple bids for its last and largest daily print publication. Media General chose to sell the Tribune (including its tbo.com online site and some smaller area papers) for a mere $9.5 million to Los Angeles-based Revolution Capital Group.
The buyer has no in-depth newspaper experience, though at least one of its managers claims a background in digital media in Southern California. A five-man Revolution Capital team was introduced to the Tribune newsroom Monday amid shouts and applause following years of staff cuts and, recently, greater uncertainty after billionaire Warren Buffett bought every major Media General newspaper except the Tribune.
Revolution founders Robert Loring Jr., 48, and Cyrus Nikou, 33, say the Tribune is a long-term investment and insist the newspaper will not be flipped to another buyer in the coming years.
"We are delighted to be the new owner of the Tampa Tribune, a newspaper with strong brand equity," Loring said in a statement. "We believe strongly in the value of local content."
Before starting Revolution Capital, Nikou and Loring worked for various investment firms. The Revolution Capital website says Nikou founded a California firm called Funded Capital and earlier was a managing partner of another firm called IMC, though there's little press coverage of those experiences.
Loring was a European director for HIG Capital Partners, a Miami-based private equity firm. Before that, Loring worked as vice president of mergers and acquisitions at another private equity firm in Beverly Hills, Calif., called Platinum Equity.
That's notable because Platinum Equity bought a major newspaper, the San Diego Union-Tribune, in 2009 for an undisclosed amount. It sold the paper in early 2012, only three years later, to a San Diego developer and hotelier for a reported $110 million.
If today's Tribune can be had for less than $10 million, what might it sell for under financial control of another private equity firm by, say, 2016?
For newspapers, an industry considered deeply challenged by the economics of the digital world, private equity firms loom large as turnaround buyers. That's because private equity firms can buy newspapers now on the cheap, as Revolution Capital just did with the Tribune, and are unburdened as most existing newspapers are these days with high legacy costs and diminished sources of revenues.
Florida is neck deep in this trend. Earlier this year, five newspapers surrounding the Tampa Bay area — the Sarasota Herald-Tribune, the Lakeland Ledger, the Ocala Star-Banner, the Gainesville Sun and the Winter Haven News Chief — were sold to Halifax Media in Daytona Beach. The deal brought to 16 the number of newspapers in Florida alone that are now owned by Halifax. That Florida company, in turn, is owned by Stephens Capital Group, an Arkansas private equity firm.
Two major Florida newspapers — the Orlando Sentinel and the South Florida Sun Sentinel — are owned by Chicago's Tribune Co. That company is expected to emerge from bankruptcy this fall. When it does, its new owners will include JPMorgan Chase and two investment firms.
In fact, in addition to the Tampa Tribune, the owners of the major newspapers in Orlando, Fort Lauderdale, Miami, Jacksonville and Palm Beach are companies all based outside Florida.
Only the Tampa Bay Times, Florida's largest newspaper, remains locally owned in St. Petersburg — and not by a private equity firm.
Robert Trigaux can be reached at [email protected]