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LOS ANGELES -- Yucaipa Cos. managing partner Ron Burkle, recently in the news for being the target of alleged extortion attempt by a New York Post gossip column contributor, has his eye on buying newspapers: the Newspaper Guild is considering Burkle's bid to back its plan to buy 12 newspapers being sold by Sacramento, Calif.-based McClatchy Co. as part of its $4.5 billion purchase of Knight Ridder, Inc., based in San Jose, Calif., according to published reports.
The guild is said to be interested in Burkle's existing union connections and relationships with such power brokers as former president Bill Clinton.
Burkle can reportedly offer as much as $2.2 billion, the Los Angeles Times reported last week, as well as trade an equity stake to workers for cost concessions. According its bid with the Newspaper Guild, Yucaipa would create a company called ValuePlus Media Corp. that would use Burkle's money to buy the newspapers, among them the Philadelphia Inquirer, the San Jose Mercury News, the St. Paul Pioneer Press, the Contra Costa Times, and the Akron Beacon Journal. At an unspecified time in the future, Yucaipa would offer to sell a stake in ValuePlus to the 40(k) retirement plans of the papers' employees, possibly resulting in an employee-owned company, Bloomberg News reported.
The above ownership structure would mean that the newspapers would be exempt from some federal taxes and able to pay off debt from the buyout faster, according to Bloomberg.
In 2004 Burkle looked into buying the Chicago Sun-Times with Jesse Jackson's son Yusef Jackson, but the company that owns the newspaper decided not to sell. If he's successful in buying the newspapers currently for sale, Burkle, a Yahoo! director and investor in cable channel Current TV, is likely to explore ways to combine newspapers with the Internet and other electronic media, reported Bloomberg.
Yucaipa currently owns stakes in Boulder, Colo.-based Wild Oats Markets, Inc. and Carteret, N.J.-based Pathmark Stores, Inc.