The Pulitzer Prize-winning East Valley Tribune and its two sister newspapers would be sold to a Colorado businessman for a little more than $2 million under a deal announced today in federal court.
The current owner of the papers, Freedom Communications in Irvine, Calif., has been talking publicly since September about selling the Mesa-based Tribune along with the Ahwatukee Foothills News in Phoenix and the Daily News-Sun in Sun City.
But the media giant has struggled to put together a deal that would bring in enough cash to help begin to pay off roughly $1 billion in debt the company had compiled nationwide, which landed the chain in bankruptcy last year.
Today, after months of negotiations and false starts, Freedom finally announced the details of a plan to sell the three newspapers to Colorado publisher Randy Miller, who also owns newspapers in Tucson and Telluride, Colo. In doing so, the company also opened the door for anyone else to try to outbid Miller as part of a public auction process required by the bankruptcy court.
Under the just-announced deal, Miller would get the three newspapers, their printing presses and the building in Sun City occupied by Daily News-Sun, as well as all the trimmings that go along with owning a newspaper, such as its fleet of vehicles and use of trademarks.
Noticeably missing from the deal, however, is the Tribune’s headquarters in downtown Mesa, which the county government says is worth almost $7 million.
In exchange, Miller would pay $2.05 million. But he would also take over an operation which Freedom said is losing about $60,000 a week.
Any deal is still subject to approval from the federal bankruptcy judge in Delaware who is overseeing the case. The same judge will also be choosing from among the bids if others decide to compete against Miller.
Other bidders have until March 8 to submit their offer. A hearing will be held the following day to discuss the sale, and the judge could decide as soon as then whether to allow the deal to take place.
No matter whether Miller comes out on top, though, he represents something of a savior for the East Valley Tribune, which had the most tumultuous year of its existence in 2009. After months of layoffs and cost cutting, Freedom announced in November the cuts had not been enough; it planned to shut down the newspaper by the end of the year.
But just three weeks after the announcement, Miller stepped forward with a letter of intent to buy the Tribune and keep it afloat. Freedom called off the closure.
Since then, Miller has also said he would like to buy the Tribune’s sister papers in the Phoenix area, neither of which was ever publicly threatened with closure. The deal was slow coming, though. Freedom had originally planned to file today’s announcement with the court back on Dec. 24, but the negotiations continued well into the new year.
“I know that dealing with the uncertainty of the past several months has been difficult,” Freedom’s chief executive Burl Osborne wrote in a memo sent today to employees of the three newspapers. “I want to thank all of you for your continued focus and dedication as we worked to achieve this sale.”
But while some of the ongoing questions were settled by today’s announcement, many uncertainties remain until the deal is finalized.
For one, Miller has said he plans to keep a “significant number” of employees – but not all of them, meaning layoffs will ensue if he buys the newspaper.
Osborne said in his memo that question would be answered soon, too. Under the deal, employees who are being laid off will be handed pink slips the day after the bankruptcy court gives its approval.
[Full disclosure: I am a former reporter for the East Valley Tribune.]