It comes as no surprise to yours truly that state Sen. Jim Dabakis, D-Salt Lake, has confirmed he is trying to buy The Salt Lake Tribune.
I joked about a Dabakis-owned Tribune in a “what if” column months ago.
Dabakis (will he also be Democratic gubernatorial candidate Mike Weinholtz’ LG running mate this year?) has been active in the “Save the Tribune” movement for some time.
This story in Wednesday’s Tribune confirms Dabakis is on of five “progressives” putting forward a purchase of the Tribune, Utah’s largest daily.
So far, the names of the other four investors remain secret.
Wouldn’t it be sweet – and ironic – if some of those others include members of the Kearns-McCarthy family, which owned the Tribune for decades before selling it in the 1990s for a reported $700 million stock-swap to the former cable TV giant TCI.
The extended family got a reported $300 million in that deal, with more than a few long-time Tribune staffers (underpaid and overworked for decades) getting $1 million in then-Tribune Corp. stock in their pension funds.
Dabakis does have business connections with the McCarthy family. (See the attached email announcing the closing of the Park City Main Street art gallery of Thomas Kearns McCarthy, where Dabakis and his partner’s Russian modern art work has been sold. Dabakis has reportedly become a millionaire over wise Russian art investments and brokering.)
The McCarthy’s et al. Tribune sale, ironically, are part of the reason for the Tribune’s severe financial woes today.
Through a tax-avoidance scheme gone awry, the family sold the Tribune to TCI, with the understanding it would buy the paper back after seven years at a reduced price.
But things went way bad.
TCI was sold to AT&T. And the telecommunications giant didn’t want a newspaper.
With the agreement – or at least the understanding – of the owner of the Deseret News, the LDS Church, Dean Singleton and his newspaper group bought the paper in the 1990s from AT&T.
A court battle ensued. But Singleton, in one-day offer, allowed the original owners a chance to buy it back.
The McCarthys didn’t buy it, (they were fighting over its market value).
And the family appeared out of the picture.
Newspaper prices plummeted, Singleton’s newspaper chain was bought by a New York City hedge fund, and, as with the case across the nation, staff layoffs came to the Tribune.
Then it was learned that the LDS Church bought from the hedge fund the real assets of the Tribune – including picking up sole ownership of the MediaOne printing plant in West Valley.
The joint operating contract was also changed, with the church buying a new profit split from the hedge fund – 70 percent for the DNews, only 30 percent for the Tribune.
And a new lawsuit was filed by the Utah Newspaper Project, claiming the federal anti-trust provisions under the newspaper failing act were violated. That case is still moving through the Utah federal court.
Whew!
And a lot of history and inner power plays by the News/Church and Singleton/hedge fund along the way.
Noted billionaire/philanthropist Jon Huntsman Sr. attempted to buy the Tribune last year. But that deal fell through, perhaps because Huntsman and LDS Church leaders couldn’t agree on a new profit split between the News and Tribune.
In any case, now comes forward Dabakis saying he and his “progressive” partners want to buy the paper.
This week Dabakis sent out a news release saying he had met in Washington, D.C., with Justice Department anti-trust folks advocating the Save the Tribune/Newspaper Project legal position, and offering to buy the paper.
The new JOA says the News can veto potential Tribune buyers, with the church people saying they should have the right to decide who their business partners are.
It seems far fetched to me that LDS Church leaders will want to be in business with Dabakis – who often claims friendship with the church, but seems to regularly give head-slaps to the Mormon/Republican/political hierarchy in Utah.
A side note: Back in the early 1900s, then-U.S. Sen. Thomas Kearns, a recent multi-millionaire via Park City silver mining, was getting killed in The Salt Lake Tribune – editorials and news stories making fun of the little-formal-educated Irish immigrant.
Kearns secretly bought the Tribune. And immediately the paper started saying nice things about the good senator. Only several years later did it become publicly known that Kearns had bought the paper – which then was a small part of the family empire, but grew in importance over the next 80 years.
Now another politician wants to buy the paper? At least Dabakis is upfront about it.
The Kearns-McCarthys sold the Tribune to make a whole lot of money – around $300 million by some estimates.
Wouldn’t be ironic if the family, via Dabakis and a few others, can get the paper back for, what, maybe $5 million, or even $1 million?
The Tribune has no real assets – no buildings, no printing presses. Its value is its dedicated journalists, subscription list and good name (at least among more liberal Utahns).
How’s this for a name: James Dabakis, publisher of The Salt Lake Tribune.
Has kind of a nice ring to it, doesn’t it?
But beware what you wish for, newspaper staffers and loyal Tribune readers.
Serious conflicts of interest could be coming down the road.
