The Star Tribune Sale

Power Line has some observations on the sale of the Minneapolis Star Tribune to a private equity group. The previous owners, McClatchy Co., bought the paper for $1.2 billion in 1998 — they sold it for only $530 million. Ostensibly, McClatchy sold the Strib to offset the taxable gains they incurred when they bought out the Knight-Ridder newspaper chain. However, it doesn’t take a genius to figure out that if you’re willing to sell something for less than half of the price you bought it, it’s not a valuable property.

The old newspaper industry is dying — dead-tree editions of the newspaper just aren’t selling enough to turn a profit these days. When the Strib was resorting to wallpapering their website with those gawdawful Denny Hecker ads, it was a sign that they were looking for any way they could to pay the bills. There are simply too many news sources around — sources that don’t have the endemic bias of the old media.

The Strib is unlikely to fold, but perhaps the new owners will provide it with more balance, more relevance, and more innovation.