Feeds:
Posts
Comments

Archive for December, 2018

Thursday afternoon’s news that Tribune Publishing’s board of directors had rejected a purchase offer by the McClatchy Co. has to come as a relief to most readers and employees of McClatchy’s 29 daily papers, including The Star.

McClatchy has been trying to cut its way to profitability since it purchased the Knight Ridder chain for $4.5 billion in 2006, and its print-to-digital effort has not gone well. And so, the prospect of McClatchy — some $800 million in debt — acquiring a significantly larger newspaper company just didn’t make sense.

Somehow, though, the company managed to put together what some reports called “a fully financed offer” that included $15 a share in cash and the rest in stock. Tribune’s shares closed slightly down Thursday, at $13.58, while McClatchy shares rose 6.5 percent to $8. (It was about $50 a share when it purchased Knight Ridder.)

The company obviously was able to tap into a funding source — perhaps a hedge fund — but I think it lost its edge after Patrick Soon-Shiong, who holds a 25 percent share in Tribune decided against throwing in with McClatchy. Earlier this year, Soon-Shiong, a surgeon, entrepreneur and philanthropist, purchased the Los Angeles Times and San Diego Union-Tribune from Tribune for $500 million.

Patrick Soon-Shiong (left) walking through the Los Angeles Times newsroom

In the heady weeks after that purchase, he reportedly was interested in teaming up with McClatchy to buy Tribune largely because of McClatchy’s string of California papers. The New York Post reported late last month, however, that Soon-Shiong had cooled to that prospect because of a declining print and digital audience in LA. In other words, he got a taste of the new reality that McClatchy has been dealing with since 2006.

With McClatchy out of the picture, the odds-on favorite to purchase Tribune is the combined team of the Donerail Group, headed by former hedge fund Will Wyatt, and AIM Media, a fast-rising company that owns papers in Texas, Ohio, Indiana and West Virginia.

AIM is headed by Jeremy Halbreich, former president of the Dallas Morning News and former chairman of the Chicago Sun-Times.

When I asked a local investment banker a couple of months ago what he thought was going on with McClatchy’s seemingly low-percentage attempt to buy Tribune, he said, “It’s a way to reorganize without going through bankruptcy.”

To me, this looked a lot like a Hail Mary pass. A desperate attempt to make some waves and start over with something resembling a clean canvas.

But now, with the pass falling short and given the depressing way things have been going, bankruptcy appears all the more likely for McClatchy.

As far as I know, no other chain is up for sale, and it would be difficult, anyway, to simply switch streams and reach out for another chain. Should McClatchy file for bankruptcy, it could either be purchased wholly or broken up, with its papers sold individually or in smaller groupings.

A break-up is the scenario I’m hoping for because it would offer the best chance of a deep-pocketed “angel” swooping in, buying it and attempting to restore it to its former status as a key element in the Kansas City fabric.

**

Reaction to Thursday’s development on the Kansas City Star Bylines Facebook page was not sympathetic.

Duncan Moore, a former Star reporter who now lives and works in Chicago posted this:

“Lucky for us here in Chicago. All we need is another absentee corporate owner that’s going down the tubes!”

And Les Weatherford, a good friend who worked on The Star’s copy desk for many years before being laid off after the McClatchy purchase, wrote, “Boo hoo hoo.”

No, McClatchy hasn’t won many fans here in Kansas City — nor, I would imagine, in any of the other cities that had Knight Ridder papers.

Not that being owned by Knight Ridder was a bowl of cherries, but I don’t believe there were any layoffs during the years KR owned The Star.

And in the end, Knight Ridder got lucky: Its board decided to sell after a major, disgruntled stockholder agitated for it, complaining that Knight Ridder stock was not performing as well it should have.

In the sale to McClatchy, Tony Ridder, Art Brisbane and other top KR executives made millions and walked away contentedly. At The Star (and the other KR papers) we didn’t realize it at the time, but the misery was just starting.

Advertisements

Read Full Post »

Kansas City Star employees and readers should be watching closely the next few days or weeks to see what happens with regard to its corporate owner, the McClatchy Co.

Common sense says there’s no way McClatchy, which owns 29 daily papers, could buy the larger (in financial terms) Tribune Publishing Co., which owns the Chicago Tribune and several other papers, and yet I keep seeing reports that McClatchy is in the hunt.

Just yesterday, Keith J. Kelly of the New York Post reported that McClatchy executives were “visiting some of the papers involved in a potential sale.”

Kelly quoted an anonymous source as saying “if it (a deal) doesn’t happen this week, it may not happen at all.”

…I tell you, those of you who still have two good knees (not me) should get down on them and pray that McClatchy doesn’t get control of Tribune.

McClatchy is a certifiable disaster as a journalistic enterprise and has been since it paid $4.5 BILLION for the Knight Ridder chain in 2006. That was at the precise time the newspaper industry was starting down what has turned out to be an amazingly steep slope.

I’d like to call on Congress — before it goes on Christmas break — to quickly pass a bill prohibiting any company with an $800 million debt from buying another company.

Not just that…McClatchy also has cut thousands of jobs at its papers and has reduced its print editions to shells of what they used to be.

And yet, if Keith Kelly is correct, this dolphin of a newspaper chain has its little jaws open and is chasing another whale.

It’s not clear if a wealthy individual or a hedge fund — or some other entity – is backing McClatchy’s bid, but it certainly can’t swing such a deal on its own. To me, it’s far-fetched from every possible vantage point.

More likely, from my way of thinking, is that Tribune ends up in the hands of a team of two men who have teamed up on a competing bid.

Heading that team are Will Wyatt, a former hedge fund manager, and Jeremy Halbreich, chairman of a fast-growing, private company that owns papers in Texas, Ohio, Indiana and West Virginia. Halbreich’s main claim to fame is resuscitating the Chicago Sun-Times several years ago.

Keith Kelly reported a couple of weeks ago that the Wyatt-Halbreich team had the financial backing of Texas billionaire H. Ross Perot. If that’s the case, Wyatt and Halbreich would seem to be holding a very strong hand.

According to Kelly’s New York Post story of Tuesday, Wyatt and Halbreich would be employing a “buy to bust it up” strategy, that is, selling off most of Tribune’s papers but keeping the Chicago Tribune as flagship.

On the other hand, I assume McClatchy would be buying with an eye to hold onto the new properties.

**

From The Star’s standpoint, not much good can come out of this particular deal, however it turns out.

If Wyatt and Halbreich emerge the winners, McClatchy regroups and continues trying to cut its way to profitability.

If McClatchy somehow pulls the deal off, it extends its failing print-to-digital strategy to another dozen or so papers.

Either way, it continues stumbling and fumbling along.

The best scenario, in my view, is bankruptcy, with a “bust up” that frees 29 daily papers from the grasp of company that has been tanking for a dozen years.

It’s hard to imagine how any other course could be worse than continued ownership by McClatchy. So I say, death to McClatchy, liberty to its newspapers.

Read Full Post »

A couple of weeks ago, one of my old Louisville buddies, John Blakeney, who now lives in Florida, posted a comment asking about the “status or progress of the new airport in Kansas City.”

“You were so wound up about it a few years ago,” John wrote. “Your comments now would be interesting to me, and probably a lot of your readers.”

Because the comment was unrelated to the post at hand, I moved it to the trash. But his prodding stuck with me because what he said was true: I lobbied hard for council and voter approval of a new airport, and I haven’t written about it in several months, despite a series of mostly troubling developments.

So today, it’s back to the airport, although, frankly and unfortunately, I don’t have a lot of insight to give you. Instead, it’s mostly opinion and frustration. But come along, anyway…

At this writing, the estimated cost of a new, single terminal has risen from $964 million to $1.64 billion since 2015. As The Star said recently, much of the price increase has been due to “expanding gates and holding rooms.”

That’s a 70 percent jump. SEVENTY PERCENT!

Here, then, are my main thoughts, which I’ll explain individually.

:: This has all the appearances of a bait-and-switch deal.

:: Nevertheless, because of the path Mayor Sly James and the rest of the City Council chose to go, there’s very little we, the public, can do at this point. Our hands are tied, and the Council has limited flexibility.

:: My biggest concern now is not cost, which is largely out of our control, but what the airport is going to look like and how it will function. Again because of the path the Council embarked on, we and the Council will have limited input into design and functionality.

Let’s take a closer look at each of those points.

Bait and switch

As we all know, it took several years for the single-terminal idea to come into focus. Because they will pay for it, the airlines were intimately involved from the outset. That means there was no shortage of planning time.

The original plan called for 35 gates, four more than the city currently leases to airlines at KCI. At the time, 35 struck some people as surprisingly low. Passenger traffic has been going up steadily for years, the metro area continues to grow, and people have grown accustomed to paying the much higher fares that have come with airline deregulation.

It wasn’t until April, five months after voters overwhelmingly approved construction of a new airport, that the airlines came forward and said, oh, we miscalculated…traffic has been going up faster than we realized and we need more gates. Now it’s up to 39, with the ability to expand to 42.

A KC Star story in April said this: “Officials said the expanded plans took shape over the last two months…As initial design work started, the city, Edgemoor (the winning contractor) and the airlines said they re-examined original assumptions to make sure they were sound.”

You don’t have to be Ebenezer Scrooge to scoff at the assertion that the “original assumptions” changed within a couple of months. The hard-to-avoid suspicion is that some city officials and the major airlines floated a very conservative number to induce a “yes” vote from the public.

If that was the intention, it worked. But it has cost the city, Edgemoor and the airlines a lot of credibility. I don’t know how they go about regaining significant credibility at this point, but it would certainly help if the three parties were to resolve the current problems in short order and get the show on the road.

The chosen path

I have said from the beginning — and I testified to this effect before the City Council’s Aviation Committee in 2017, well before the public vote — that the city should have gone about this process the tried-and-true way. That is, the city should have solicited proposals for a comprehensive design, approved a design and then advertised for construction bids based on the design. That way the city — the owner of the airport — would have been clearly and unequivocally in charge of the project.

Not to mention that the public would know what the hell the building would look like!

But, no. Desperate to get off dead center, Sly and two other council members — Jolie Justus and Mayor Pro Tem Scott Wagner (both of whom are mayoral candidates now) — jumped at a seductive but overpriced proposal from local company Burns & McDonnell to build the airport on a no-bid contract.

From there, The Star’s editorial board pushed hard to allow other companies to submit proposals, and that’s what happened. What the editorial board should have done, however, was call for the Council to throw up the stop sign and go back and adopt the traditional design-first, build-second process.

This flawed process is now so far down the line it’s almost impossible to reel it back. And it’s a mess. So far, Sly has not been able or willing to exert sufficient pressure to push the airlines to hammer out a deal. Even more problematic, once the airlines decide how to apportion expenses among themselves and the start of construction nears, the balance of power will shift to Edgemoor. Because the city threw the project out to contractors like a piece of red meat, Edgemoor essentially will be able to dictate construction terms and run the tab up for the inevitable “change orders” that accompany all major construction projects.

Design

Never did I expect anything as singular and spectacular as the white “tents” — mimicking snow-capped peaks — above the terminal at Denver International Airport. But with the backassward way the city has gone about this, I’m just hoping we will end up with something that isn’t visually awful.

Instead of being the first consideration, design is bringing up the rear. Edgemoor’s primary consideration will be budget. It won’t be building to a city-specified design; it’ll be building to an agreed-upon price. That means the design will probably be pretty simplistic. I’ll be extremely surprised if it’s anything above plain-jane-mundane. I hope it will be at least functional, with plenty of natural light.

What we have seen so far from Edgemoor, in the way of design, is so rudimentary it’s laughable. There’s the rendition of the main building with a curving roof, but the focus is on a big airplane parked at a gate. (How unique!) Then, there’s a rendition of the interior with people walking about under ribbon-like ceiling panels interspersed with views of the sky. (We can only hope the interior approximates the blend of cover and natural light.)

**

The gist of all this is that Edgemoor managing partner Geoff Stricker is in the cockpit, and the rest of us — including the City Council, the Aviation Department and the airlines — are along for the ride.

Keep your seatbelts fastened, everybody; it’s going to be a long ride, with lots of turbulence.

Geoff Stricker

Read Full Post »

Journalism attracts and produces some quirky personalities, and one such person was Giles Fowler, who spent 24 years at The Star before heading off into to a second lengthy career in academia.

He taught journalism for one year at Kansas State University and then moved on to Iowa State, where he spent more than 20 years before retiring in 2002.

Giles Fowler

I had heard earlier this month that Giles had died in Ames, IA, and his obituary finally appeared in The Star today. (The timing of an obit is strictly up to the family.)

The obit was as quirky and singular as Giles and perfectly befitting a colorful journalist. It began like this…

Giles Merrill Fowler, father, husband, journalist, author, teacher and cheerful troublemaker, died riding a deep and emphatically requested morphine wave Nov. 3 at Israel Family Hospice House in Ames. He spent most of 84 years indulging his appetites for life’s finer pleasures, particularly stimulating company and a bottle or four of the good stuff, with infectious verve and vigor. He fought the indignities of aging with a witty, vinegary constitution. The cause of his demise was a tooth infection that led to respiratory and cardiac complications.

Giles was married and divorced twice. His first wife, Jane Pecinovsky Fowler, lives in Overland Park. She also worked at The Star.

Richard B. Fowler

Fowler was a journalistic blue blood. His father, Richard B. Fowler, spent his career at The Star, ultimately rising to editor and president. I never met Richard Fowler; he retired in 1968, the year before I arrived in Kansas City. In retirement, Richard spent much of each year in Mexico but continued to contribute stories to The Star on the politics and economics of Mexico. While visiting Morelia, Mexico, he was killed in an automobile accident on August 19, 1978, at the age of 76.

The writer of Giles’ obit said, “Giles was doomed to follow his father into that disreputable but joyous trade.”

**

At The Star, Giles worked as a reporter, film and theater critic and, finally, as editor of the Sunday magazine, which for decades was a substantive and excellent publication.

I was never close with Giles, but he was one of those newsroom personalities who stood out. He was a relatively short man, wore tinted glasses, talked fast and moved around quickly — sort of like Groucho without the forward tilt.

The only significant interaction I ever had with Giles occurred in about 1979, a year after I had left the Jackson County Courthouse beat and had moved to the features section on the morning Kansas City Times. Over a period of a few years, I had written two or three freelance stories for the Sunday magazine (before Giles became its editor), and when a magazine writing position opened up, I was very interested. I applied, and Giles invited me for an interview at the magazine office, which was across 18th Street in what we used to call the Topsy building.

Going into the interview, I thought I was a virtual lock for the job. I couldn’t imagine who at the paper might beat me out.

I sat across the desk from Giles, and he leaned back casually and smoked a cigar as we chatted. Picking up on his demeanor, I got pretty casual myself. In fact, I had a cigar with me and pulled it out and lit it up…There we were, sitting across from each other, smoking cigars and chatting idly about who would fill a relatively important position that was up for grabs.

My feeling of self-content and confidence soon began to ebb, however, when Giles started talking about another reporter who had applied for the job. He didn’t name the other reporter but said something like, “He’s a very sensitive writer.”

I couldn’t imagine who he was talking about, but as he went on about that reporter, my cigar started losing its lustrous aroma. By the time I left, I knew I had just lost out on the first internal promotion I had applied for.

Word came out a week or so later that the winning applicant was a Star-side reporter (we had both The Times and The Star until 1990) named James Kindall.

I knew Kindall as a quiet sort of person who let his writing do his talking. He was outstanding — and far better qualified than me for a feature-writing, magazine position.

I clearly remember one story he wrote, although I don’t remember if it was for the magazine or the newspaper itself. It was about Sam Walton and Kindall’s exhaustive effort to find him and interview him. The story was titled something like “On the hunt for Sam Walton.”

James Kindall

Kindall went to Bentonville, Wal-Mart’s headquarters, determined to talk with Walton. He first went to his office but was told Walton didn’t give interviews. Kindall then started talking to Bentonville residents, who assured him Walton was always out and about and that Kindall would certainly come across him somewhere. One place Walton frequented, Kindall learned, was the coffee shop at the local Holiday Inn. Kindall went there a couple of mornings but had no luck.

Then, early one morning, about 5 a.m., Kindall went back to Wal-Mart and pulled in the parking lot, outside the executive offices. Soon, an older-model car pulled up in the darkness, and a man got out of the car and started walking toward the door. Kindall jumped out of his car and intercepted the man as he reached the door and said, “Mr. Walton?”

At last, he had homed in on his target. Walton invited Kindall into the office and told him he was impressed with his perseverance but that, nonetheless, he would not give him an on-the-record interview. They chatted a while, and Kindall left, returning to Kansas City with an intriguing story about Walton.

**

Within a year or two of hiring Kindall, Giles Fowler left the paper for a one-year teaching post at Kansas State, and then he went on to Iowa State.

Kindall stayed on the magazine a few years and then went to Long Island Newsday, where he worked for nine years. For about the last 20 years, from what I can determine, he has been a freelancer, writing under the handle “Have Pen Will Travel.” He still lives on Long Island.

I continued writing features for The Kansas City Times until I returned to my political reporting roots. I got the City Hall “beat” in 1985 and stayed there 10 years, before becoming an assignment editor, the post I retired from in 2006.

Several years back, I would see Giles occasionally at Laura Hockaday’s annual KC Star reunion at the Kansas City Country Club. But now Laura’s gone, Giles is gone, and, I believe, the reunion is gone. I will never forget that day, though, I sat in Giles’ office, smugly smoking that cigar, convinced I was on the cusp of becoming a magazine writer.

Read Full Post »

« Newer Posts