We Own a Newspaper?

By Rosenberg, Jim | Editor & Publisher, June 12, 1999 | Go to article overview

We Own a Newspaper?


Rosenberg, Jim, Editor & Publisher


AT&T acquires Utah's biggest daily in its deal with TCI

This decade's media megamergers placed some newspapers, at least temporarily, in the hands of unlikely owners.

Soon after the Walt Disney Co. bought ABC/Cap Cities in 1995, for example, chairman Michael Eisner said his largely entertainment- oriented company would not spin off its new newspaper properties. Almost two years later, however, it sold the lot to three newspaper groups.

As first reported in E&P Interactive (www.mediainfo.com), an unintended, somewhat ironic, consequence of AT&T's March 9 merger with Tele-Communications Inc., the world's biggest cable-TV operator, put the phone company into the newspaper business. Now, the question is whether, when, and to whom AT&T will sell its very own metro, The Salt Lake Tribune, with a daily circulation of 133,561, and Sunday circulation of 161,857.

Unlike Disney, AT&T concedes it has no interest in keeping the newspaper and will probably sell it. But the Tribune's management group, to whom it must be offered first, has yet to hear from the new owner.

"At some point now," says publisher Dominic Welch, "they have to call me."

Whatever else it may have accomplished, Ma Bell's breakup years ago hardly calmed a newspaper industry suspicious of a new breed of competitor able to control the network that would carry a then-new type of "content" - audiotext information. Newspapers complained ceaselessly of the danger that local phone monopolies might give preferred treatment to their own future ventures in information services beyond directory publishing. Trying to rein in the Baby Bells he helped to create, U.S. District Judge Harold Greene was pressed by all sides - telcos, publishers, even a federal appeals court.

By the mid-1990s, however, concern with the telcos evaporated along with interest in audiotext as a major future business. The Web had arrived, with its own new commercial competitors for newspapers to fret about. For the most part, local and long-distance phone companies spent the decade distracted by their own deals.

But now that the long-distance successor to the original phone company giant has merged with the cable-TV industry giant, it not only has captured control of considerable coaxial bandwidth but also has landed smack in the newspapers' core competency: ink-on-paper content.

AT&T's deal with TCI brought it Kearns-Tribune Corp.'s and Utah's largest newspaper. The group was acquired by TCI in a 1997 transaction that included real estate and called for issuance and exchange of stock shares.

According to Denver Rocky Mountain News reports, that arrangement not only could have benefited Kearns-Tribune owners but also boosted TCI chairman John Malone's shareholder-voting power and helped to pay taxes owed by the estate of TCI's founder.

Last year, TCI sold The Daily (Nev.) Sparks Tribune, the Lewiston (Idaho) Morning Tribune, the weekly Whitman County (Wash.) Gazette, and The Moscow-Pullman Daily News (serving adjacent communities in Idaho and Washington, respectively) to employees under publisher and former owner A.L. "Butch" Alford.

To judge by media-affairs and investor-relations personnel's buck- passing and inability to respond, AT&T initially seemed unaware that it owned its new Salt Lake City morning newspaper. (Following posting of the original E&P Interactive story, a call from another news outlet led an AT&T spokeswoman to say that her company was aware of the Tribune and that, although it had no plans for the paper, AT&T typically divests itself of noncore businesses.)

When it passed to TCI in a tax-free exchange of stock, Kearns-Tribune's total worth was estimated at more than $620 million. Kearns-Tribune was owned by two families and the company's employees. Former directors who continued to manage the Tribune autonomously under TCI were given the the right to buy back the business in 2002, or sooner if TCI chooses to sell. …

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