By Liana B. Baker
(Reuters) - Tronc Inc, owner of the Chicago Tribune and the Los Angeles Times newspapers, has gained entry into the United States' top media market by acquiring the New York Daily News from publishing and property mogul Mort Zuckerman.
Tronc disclosed in a filing early Tuesday that it had paid $1 in cash plus the assumption of liabilities for the nearly 100-year-old tabloid newspaper and a state-of-the-art printing plant in Jersey City, New Jersey, across the Hudson River from New York City.
The Chicago-based company will assume the Daily News' $26.5 million in pension obligations as well as about $35 million in insurance and workers' compensation liabilities, the filing said.
The News, which bills itself as "New York's Hometown Newspaper," has long been a paper aimed at the working class in the nation's biggest city. It once was home to some of New York's top columnists, such as Pete Hamill and Jimmy Breslin.
But, as with the newspaper industry as a whole, its fortunes have declined. It has also had to compete for advertisers and readers with the city's other tabloid, the New York Post, owned by Rupert Murdoch's News Corp.
Tronc was interested in the News because of the 25 million unique monthly visitors drawn to its website, which will increase Tronc's digital audience, Tim Knight, the president of Tronc digital unit TroncX, said in an interview. These users will increase the reach of Tronc, which drew 55 million average monthly unique visitors in the second quarter.
The News also has daily print circulation of 200,000 and Sunday circulation of 240,000.
Tronc executives declined to comment on any future job cuts at the newspaper.
Cowen & Co analyst Lance Vitanza said in a research note that New York City was an "obvious gap in Tronc's footprint" and said it would accretive to Tronc's earnings and free cash flow within 12-18 months.
Tronc is doubling down on newspapers at a time when total industry newspaper revenue is expected to fall to $23.9 billion in 2021 from $33.3 billion in 2012, a decline of 28 percent over a decade, according to PwC.
Tronc executives also said they would look to implement the ARC publishing system it has licensed from The Washington Post at the Daily News after it finishes putting it into effect it in other cities.
Tronc said late on Monday it would also buy a 49.9 percent interest in a joint venture with Zuckerman-related entities that will own the 25-acre parcel of land on which the Daily News' printing facility in New Jersey is located.
Tronc's predecessor, The Tribune Co, founded the Daily News, and with the transaction, Tronc will serve 10 major U.S. markets, Tronc Chief Executive Justin Dearborn said. Tronc's other newspapers include the Baltimore Sun, the Hartford Courant and the San Diego Union-Tribune.
Zuckerman, who first put the Daily News on the auction block in February 2015, sought $200 million for the paper at the time, and later scrapped the sales plans. (http://reut.rs/2gADvAe)
On Aug. 21, Tronc announced that digital media veteran Ross Levinsohn would take over as chief executive officer and publisher of the Los Angeles Times as part of a shake-up of senior management there.
(Additional reporting by Sangameswaran S and Rama Venkat Raman in Bengaluru; Editing by Amrutha Gayathri and Jonathan Oatis)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)