March 18, 2009 / 6:46 PM / 11 years ago

UPDATE 2-San Diego paper finds buyer, Tucson paper may sell

(Changes dateline, adds San Diego Union-Tribune sale announcement)

By Robert MacMillan

BUCKFIELD, MAINE, March 18 (Reuters) - The Copley Press said on Wednesday that a private equity company will buy The San Diego Union-Tribune, and Gannett Co Inc (GCI.N) said that a “couple of parties” may want to buy the Tucson Citizen.

Platinum Equity, a private equity firm in Beverly Hills, California, will buy the Union-Tribune for an undisclosed price. It will end 80 years of Copley ownership of the paper, it reported on its website on Wednesday.

Gannett executives, meanwhile, told financial analysts in a webcast in New York on Wednesday that it is discussing terms on possibly selling the Citizen, but declined to provide more details.

The paper was to print its last edition on Saturday. It will stay open while the talks continue, Gannett said.

News of interest in the Citizen and the sale of the Union-Tribune came a day after Hearst Corp said that it would discontinue the Seattle Post-Intelligencer’s print edition, lay off most of the staff and make it an online-only paper.

Hearst also has said that it would consider shutting down the San Francisco Chronicle unless it could get the paper’s unions to agree to significant cost cuts.

In February, EW Scripps Co SSP.N closed the Rocky Mountain News. Hearst and Scripps had said that all the papers were losing money.

Newspapers across the United States are reeling from 15 to 20 percent declines in advertising revenue as the economic recession cuts ad budgets and as more people get their news for free online instead of in print.

Some papers are losing money and may not survive. Others make a profit, but their publishers are facing heavy debt loads. Some, like Tribune Co, have filed for bankruptcy because of this.

Some publishers have put their papers up for sale, but finding buyers has been difficult, even at historically low valuations. As cheap as newspapers seem to be, would-be buyers worry that their value could fall even more with no end to the economic crisis in sight.

In Tucson, Gannett had planned to close the paper by Saturday, ceding the newspaper market there to Lee Enterprises Inc (LEE.N), which owns the Arizona Daily Star.

Gannett’s financial presentation on Wednesday showed how ad budgets are hurting. It said that advertising revenue at its largest paper, USA Today, would likely decline 30 to 35 percent in the first quarter compared with the same period a year ago.

Gannett executives also told analysts that they expect total television revenue to be down in the mid-teens percentage points for the quarter.

It also said it expects capital spending to be close to $100 million in 2009.

For the Copley Press, which owns the Union-Tribune, it will mark the family’s exit from the newspaper business. It already had been scaling down, selling its nine Midwest papers to GateHouse Media GHSE.PK for $380 million in 2007.

The sale likely will happen in the second quarter, the paper reported. Other companies that had looked at buying the Union-Tribune since it went up for sale include Tribune Co, MediaNews Group and Los Angeles billionaire Ron Burkle’s Yucaipa Cos, the paper reported.

The Platinum Equity group that will buy the Pulitzer Prize-winning paper includes David Black, whose company Black Press owns small papers in Canada. It also owns the Honolulu Star-Bulletin in Hawaii and the Beacon Journal in Akron, Ohio. (Reporting by Robert MacMillan, editing by Gerald E. McCormick and Carol Bishopric)

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