Back in 1998 when I was at the Star Tribune, the Cowles family sold it to McClatchy for about $1.2 billion. McClatchy was a big surprise -- hardly anyone at the paper had heard of the company, and the sale price was a shocker.
I left the Star Tribune in 1999, and now McClatchy has sold the paper to a private investment group for $530 million, less than half that. I'd love to be able to point to myself as a factor (and maybe throw in a couple of others, such as Tim McGuire and Tom Mohr) but not even my kids will believe that line.
We're in the middle of a painful, large-scale restructuring of the news business, and investor confidence has fallen sharply. When the Star Tribune deal went down, the major losing bidder was the Tribune Company. Two years later it bought Times Mirror in an $8 billion deal, and since then its market valuation has dropped by ... about $8 billion.
Today's Star Tribune is no less of a quality product than the newspaper of eight years ago. What's different is the world around it.
Is it a better world? Are we happier? It makes no difference whether we like it; the change is inevitable. The newspaper's future is dimmed by 50 percent. It's time to focus on plans B, C and D.
PS: There's one other thing that's different this time around. In 1998, the Powers that Be tried (without success) to control the story and release it for print-first publication. In 2006, the story was broken first on the Web.
Comments
Too little, too late
Steve, I don't think controlling the story is an issue anymore...the newspapers have pretty much given up on that. Gannett is trying to narrowcast as best they can by spreading themselves way too thin and leaving gaps in their coverage. My question is why would anyone in their right mind buy the Star Tribune? Especially an investment group, they usually are looking to flip them after 18-24 months. At their current rate, this will only be worth about $300 million in a few years.