Private equity funds and individual investors are vying to take over high-profile papers, including The Boston Globe and The Los Angeles Times, as well as publicly traded media companies like Clear Channel and the Tribune Company.
The moves are part of a trend in which private investors are betting they can make "old media" profitable. Many shareholders have shown they think newspapers are fading, as the Internet hurts paid circulation and ad revenue. Layoffs have hit many newsrooms hard. Stocks of The New York Times Company and Tribune Company are down 40 to 50 percent from a couple of years ago.
In Los Angeles, recording and entertainment billionaire David Geffen is reportedly interested in buying the Times — just last week, he sold a Jackson Pollock painting for a record $140 million dollars, amid speculation that Geffen is freeing up money to buy the paper.
Similarly, Jack Welch, the former head of GE, is said to be looking at The Boston Globe. Neither man has commented, but in Baltimore, Md., Ted Venetoulis says he's grown frustrated watching cuts at The Baltimore Sun — and he doesn't want to see more.
Venetoulis, a former Baltimore County Executive, is heading a group of investors who want to buy the Sun. The group is made up of local business people, civic leaders, and the head of a charitable foundation set up by the paper's former owners.
The business reality that makes the deals attractive, experts say, is that newspapers are very liquid, thanks to ad revenue and newsstand sales. That also makes it easier to get underwriting for a deal.
But if they're successful in acquiring their local paper, Venetoulis, Geffen and others will still have to worry about the bottom line. Whoever buys a paper will need to figure out how to reverse the trend of disappearing readers and falling revenues.
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