DTLA--I’m a big fan of “Game of Thrones,” but the real-life media power plays and twists of the last few weeks have taught me one thing: The battle to rule the Seven Kingdoms has got nothing on the war to control the Eight Media Groups of Tribune Publishing.
This isn’t to take anything away from Tyrion Lannister, the Mother of Dragons and George R.R. Martin’s beard — the fantasy of the fight for the Iron Throne makes for the most compelling television since “The Wire.” That said, “Game of Thrones” is made up, whereas the jarring turns, mercurial alliances and the beguiling cast of here-then-off-with-his-head executives in Game of Tribune is 100% real.
The past few months must have convinced the fact-finding newsrooms of the Los Angeles Times, the Chicago Tribune and the other publications TPUB owns that there’s no such thing as terra firma. The ground was already unsteady from a devastating round of buyouts that, locally, resulted in the loss of reporters and editors with thousands of years of combined experience and an irreplaceable sense of context. The last couple weeks alone brought a double whammy: First media giant Gannett offered $860 million for TPUB and its mountain of debt. Then L.A.-based biotech entrepreneur Patrick Soon-Shiong plunked down $70 million to buy less of the company than Michael Ferro gained in February for $44 million. Why this is a good business decision for Soon-Shiong I have no idea, but I don’t speak billionaire.
All the hubbub comes before a big meeting next week. On Thursday, June 2, there’s a TPUB corporate confab, and Gannett, which owns USA Today and about 100 smaller newspapers across the country, is urging stockholders to essentially say they have no confidence in Ferro’s vision. Expect plenty of talk about shareholder value, loads of posturing on content management and artificial intelligence, and maybe even some discussion of journalism.
In anticipation of the meeting, here is a rundown of the odd moments, bitter fights and curiosities that have turned one of the nation’s biggest media companies into the ultimate reality show.
Line of Doom: If you want to know why things are so messy today, then consider what has happened since the year 2000, when the offspring of the Chandler family made the fateful decision to sell a controlling interest in the venerable Los Angeles Times to a business from Al Capone’s city.
The line of “leaders” at Tribune Company and the spun-off Tribune Publishing is enough to make grown reporters cry. The most notorious was Sam Zell, whose nickname is the Grave Dancer (I swear that’s true), and whose Tribune strategy seemed to be built on layoffs and declaring corporate bankruptcy. In 2014 Jack Griffin arrived, holding court as the TPUB stock swan-dived from about $25 a share to below $7. Now there’s Ferro. This is the equivalent of taking the James Bond franchise, and casting as 007 first Pauly Shore, then Yaakov Smirnov, and finally Adam Sandler. Each may have an audience, but it’s all a matter of putting them in the right place at the right time.
Money Changes Everything: Ferro burst onto the scene when he shelled out $44 million for 16% of the company. At the time observers speculated that it was a play to help Griffin finance the purchase of the Orange County Register and some other publications. TPUB lost the bid and then Ferro turned pirate and tossed Griffin overboard. This is interesting because $44 million is a not-ridiculous amount of money in the big deal arena, yet considering how far Ferro has taken it, he probably deserves to win the Business Dude of the Year prize. However, Business Dude of the Year is a far cry from Business Leader of the Year, and the turnaround vision Ferro laid out May 4 was head-scratching and possibly built on pixie dust and dragon’s breath. Oaktree Capital, the second biggest shareholder before Soon-Shiong arrived, soon began pushing for a sale to Gannett.
Jonk in the Tronc: What is the strategy? Ferro and his right-hatchet man Justin Dearborn unveiled the Tronc, which from what I’ve read is a phrase that in jolly old England means pooling tips, and which here supposedly involves using high technology to mine data and target advertising. There’s all sorts of talk of artificial intelligence, though it seems less cool robots and more like how after you click on that cashmere cardigan on one website it virtually follows you around for the next week like a homeless kitten, trying to make you pick it up.
Soon-Shiong clearly sees something worth his millions, but I’ve learned to be wary when someone invents a word for a business strategy. A lot of other, really good words and descriptions already exist, and it seems that at least one should speak to the future — like “plastics!” Even Griffin had a clearly comprehensible “five-point plan.” Right now, I think the Tronc might actually be the material used to make the emperor’s new clothes.
That’s Entertainment: Give Ferro credit for one thing: He recognizes the importance of the L.A. Times: That is presumably why Ferrovision involves breaking off the paper from TPUB holdings like the Chicago Tribune and the Allentown Morning Call.
Then again, as media analyst Ken Doctor revealed in his “Lagos Gambit” column on May 5, Ferro’s plan for reviving the Times involves opening seven international bureaus, focusing on entertainment reporting in Lagos, Mumbai, Seoul, Hong Kong, Mexico City, Rio de Janeiro and Moscow.
Does this make sense? Well, ask yourself this question: How many times have you been walking in Downtown Los Angeles, licking a cone of gelato and swiping on Tinder, when suddenly you wonder, “What’s going on in the bustling film industry in Lagos, Nigeria? I need to know now!”
OK, the answer is probably never, but if this plan happens, then the Times will utterly dominate sectors like the Russian sitcom industry and album reviews from Mumbai boy bands. That’s what Times readers really want, right? Right?
Quiet Future: Gannett first offered $12.25 a share for TPUB stock that was trading below $8. It soon upped the bid to $15. Then, on May 23, TPUB announced that it had rejected Gannett’s offer and instead had accepted $70.5 million from Soon-Shiong’s Nant Capital, giving it a 12.9% stake in the company. A statement also said that TPUB’s board would negotiate with Gannett if the company will sign a non-disclosure agreement.
I get that this is all about business and money, but there’s an amazing irony in two journalism giants possibly discussing a mega-deal but hiding everything until they’re ready. Will editors forbid their reporters from trying to sniff out what’s happening?
Waiting for Independence Day: Many Angelenos have long yearned for a return to local ownership of the Times, with the belief that the paper, after years of staff cuts and Chicago-centric leadership, has moved from its core mission of serving the region. Government, civic and business leaders protested last August when Griffin fired Times Publisher and CEO Austin Beutner, and then everyone secretly thrilled when Griffin himself got his cookies taken away, only to find that Ferro is Ferro. Through it all, there has been a drumbeat for local deep-pockets leaders, possibly a team of Eli Broad and Beutner, to acquire the Times.
Soon-Shiong is local, but his stake is smaller than Ferro’s. It sets up a fascinating idea: Is he a long-term partner and content to carry water for the majority shareholder, or is he pulling a Ferro and painting a target on the current boss’ back, one that will leave Ferro writhing on the ground and gasping, “Et tu, Soon-Shiong?”
The X Factor: What happens next? I have no idea, and anyone who says they do is lying. This game is unpredictable and even less reliable than the Dodgers’ bullpen.
The media landscape is changing rapidly as print advertising goes the way of the dodo bird. A year ago no one in L.A. knew who Michael Ferro was or had an inkling that the parent of USA Today might try to gobble up TPUB. Maybe grocery magnate Ron Burkle emerges from the shadows as a suitor. Maybe David Geffen comes back to town and steps up. Maybe Kobe Bryant does. Don’t scoff — he’s got the cash after fleecing the Lakers for that last contract, and it’s as feasible as anything that has happened to date.
The one mistake would be assuming the saga has ended. As “Game of Thrones” has taught us, there’s always an X Factor, and no one at the top is ever safe.
Copyright 2016 Los Angeles Downtown News