Platinum to buy San Diego Union-Tribune

The California-based firm is buying the newspaper, which has a weekday circulation of 270,000, as the newspaper industry continues to contract amid plummeting sales.

California-based private equity firm Platinum Equity will jump into the turmoil of the US newspaper industry with its agreement to purchase the San Diego Union-Tribune for an undisclosed sum.

The paper is the only daily in the expanding San Diego market, with a weekday circulation of 270,000. It was put up for sale last July by publisher Copley Press, but although the now-bankrupt Tribune Company, MediaNews Group and buyout firm Yucaipa all expressed interest, Platinum was the only serious bidder, according to the New York Times.

“We have a long history of creating value by helping established businesses facing complex operational challenges in declining or transitioning markets,” said Louis Samson, who led the acquisition for Platinum, which specialises in turnaround situations. “[The Union-Tribune] faces enormous challenges in a period of tremendous upheaval for the newspaper industry.”

That “period of upheaval” has seen newspaper publisher Tribune Company, which was purchased by real estate investor Sam Zell in 2007, declare bankruptcy in December, while a month later the Minneapolis Star Tribune also filed for Chapter 11 protection less than two years after it was purchased by Avista Capital for $530 million.

Meanwhile, the Hearst Corporation this week shut down the print operations of the Seattle Post-Intelligencer and may do the same to the San Francisco Chronicle due to spiraling operations costs. Even the New York Times has had to sell a stake in its new headquarters for $225 million due to its falling stock and increasing debt burden.

The San Diego Union-Tribune itself has seen its advertising revenue drop 40 percent since 2006. As part of Platinum’s acquisition, newspaper publisher David Black, who owns more than 150 dailies in the US and Canada, will reportedly join the Union-Tribune’s operating committee but will have no day-to-day responsibilities.

“This was an investment that really fit our profile, and we believe we are going to go in there and help the management team bring a tighter operations focus that really makes that a business that’s going to thrive in the long term,” Platinum Equity principal Mark Barnhill said.

The firm last September closed its latest fund on $2.75 billion, with Platinum Equity Partners II making several acquisitions including the $304 million purchase of media and telecom company Covad Communications. Since it was founded in 1995, the firm has completed nearly 100 acquisitions in the IT, telecom, logistics, manufacturing and distribution sectors.