Deal in works to keep East Valley Tribune alive

By Nick R. Martin | November 20th, 2009 | 1:56 pm | 12 Comments »


Julie Moreno

A deal is in the works to sell the East Valley Tribune and keep the Pultizer Prize-winning newspaper alive after the New Year, according to two sources familiar with conversations within the company.

Publisher Julie Moreno told reporters and editors during a conference call at 1 p.m. today that the parent company, Freedom Communications, has received a “letter of intent” to purchase the printing press and keep a significant number of employees, the sources said.

The Tribune also posted news of the potential deal on its website this afternoon.

Moreno would not name the potential buyer, telling employees only that the deal has “developed very quickly” and that “Freedom considers it serious and is supportive of it,” said one of the sources.

Moreno was at Freedom’s headquarters in Irvine, Calif., when the call took place, both sources said. Taking questions from reporters, she declined to say whether the buyer was an individual, a group of investors or another media company.

Moreno also said it is possible the Tribune’s downtown Mesa building – a property assessed at close to $7 million – will not be part of the deal.

Freedom, which is under federal bankruptcy protection, would need approval from a judge before such a deal could be made. So far, no request has been filed with the bankruptcy courts.

Both sources said reaction in the newsroom was mixed following Moreno’s phone call. The news that many of the newspaper’s 140 employees could be kept on was good. On the other hand, the lack of details means the roller coaster year continues for the Mesa newspaper.

“It just adds another layer of uncertainty, whereas before there was certainty,” said one source.

The Tribune has seen numerous ups and downs since January, when the company laid off 40 percent of its staff and reduced the number of days in print to four. Later in the year, it dropped its days in print to just three.

But in April, the paper received the highest honor in its history, winning the Pulitzer Prize for local reporting. Two reporters were given the award for a 2008 investigation into the Maricopa County Sheriff’s Office.

Throughout the year, the paper’s parent company continued to cut back, including forcing employees to take wage cuts and days off without pay.

On Sept. 1, Freedom Communications declared bankruptcy beneath more than $1 billion in debt. Later that month, it announced it was trying to sell the Tribune and its other Phoenix-area newspapers, including the Ahwatukee Foothills News in Phoenix and the Daily News Sun in Sun City.

By Nov. 2, the company said that no serious buyer had stepped forward. It announced it would close down the Tribune by Dec. 31, however it would keep the other Phoenix-area papers alive.

In another sign of just how quickly the deal could be taking place, the parent company’s chief financial officer told employees on Thursday afternoon, “We remain on track to close by the end of the year.” However, CFO Mark McEachern also called the newspaper’s pending demise “a good marketing tool” to try to sell it.

Said one source of the news today: “People aren’t trying to get their hopes up too much with the roller coaster we’ve been through.”

[Full disclosure: I used to work at the East Valley Tribune and was one of the employees cut in the January downsizing.]


  • The Truth

    Whether or not a deal will be approved has nothing to do with Freedom or Tribune execs. All they can do is present the offer to the bankruptcy court handling the case for evaluation.

    Ultimately, the bankruptcy court and Freedom’s lenders would have to concur that the amount of money being offered up for the press, and all other physical assets of the Tribune included in the proposed sale, is an acceptable sum of money. It can be reasonably concluded that unless the offer in the proposed sale clearly eclipses what Freedom’s lenders value the press and other assets at in an open market, that a sale would not happen.

    There’s no way any sort of bargain or discount deal would be permitted.

    • Tru

      Actually, “The Truth” is not entirely correct. Freedom’s endorsement of this transaction carries a lot of weight. Of course, the judge is the final decision-maker, but the fact that Freedom is willingly entering into a transaction will weigh heavily in the judge’s decision. Also Freedom and the lenders seem to be on the same page — it’s the unsecured creditors that might object.

      • The Truth

        I’ll have to disagree “Tru” – Freedom carries very little weight, and the company is no longer solely in control of sellling any of its assets since it filed for bankruptcy. Any deal they attempt to make will have to be approved on numerous levels (bankruptcy judge, creditors, lenders, purshcasing party) in a short period of time.

        I do agree however, that creditors might object.

        Approval of the sale will only occur if the money raised is of equal or more value to all the property involved(press, vehicles, etc…) that would be otherwise sold off after the newspaper is shut down.

        Just don’t eat up the words of Julie Moreno or other Tribune execs – they no longer have the final word, nor much credibility in light of their bonus scam.

  • The Truth

    Whether or not a deal will be approved has nothing to do with Freedom or Tribune execs. All they can do is present the offer to the bankruptcy court handling the case for evaluation.

    Ultimately, the bankruptcy court and Freedom's lenders would have to concur that the amount of money being offered up for the press, and all other physical assets of the Tribune included in the proposed sale, is an acceptable sum of money. It can be reasonably concluded that unless the offer in the proposed sale clearly eclipses what Freedom's lenders value the press and other assets at in an open market, that a sale would not happen.

    There's no way any sort of bargain or discount deal would be permitted.

  • Why…the business model needs to be changed. Throwing more money at the problem doesn’t help anything.

  • Why…the business model needs to be changed. Throwing more money at the problem doesn't help anything.

  • Tru

    Actually, “The Truth” is not entirely correct. Freedom's endorsement of this transaction carries a lot of weight. Of course, the judge is the final decision-maker, but the fact that Freedom is willingly entering into a transaction will weigh heavily in the judge's decision. Also Freedom and the lenders seem to be on the same page — it's the unsecured creditors that might object.

  • The Truth

    I'll have to disagree “Tru” – Freedom carries very little weight, and the company is no longer solely in control of sellling any of its assets since it filed for bankruptcy. Any deal they attempt to make will have to be approved on numerous levels (bankruptcy judge, creditors, lenders, purshcasing party) in a short period of time.

    I do agree however, that creditors might object.

    Approval of the sale will only occur if the money raised is of equal or more value to all the property involved(press, vehicles, etc…) that would be otherwise sold off after the newspaper is shut down.

    Just don't eat up the words of Julie Moreno or other Tribune execs – they no longer have the final word, nor much credibility in light of their bonus scam.

  • Rob

    “Moreno also said it is possible the Tribune’s downtown Mesa building – a property assessed at close to $7 million – will not be part of the deal.”

    That roach infested POS is worth 7M?

  • Rob

    “Moreno also said it is possible the Tribune’s downtown Mesa building – a property assessed at close to $7 million – will not be part of the deal.”

    That roach infested POS is worth 7M?

  • Name

    Rob, it would be the land that makes it worth so much – not the roach intested, hodgepodgey building.

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