Hollywood mogul offered eyed 19% stake; Google was also in talks.
David Geffen’s passion for newspapers is still burning strong.
After his very public battle to buy the Los Angeles Times went nowhere, the Hollywood billionaire mogul has now attempted to purchase a 19 percent stake in The New York Times.
TheWrap confirmed on Monday that last month Geffen offered to buy 19% of the Times from Harbinger Capital Partners, but the deal fell apart because he and the owner of the shares could not agree on a price.
Harbinger acquired its stake in the NYTimes in 2007. Since then, the $500 million investment has lost more than three quarters of its value.
Harbinger has two seats on the Times board of directors.
An individual close to the negotiation who declined to be identified told The Wrap that Harbinger sought a premium on top of what Geffen was ready to offer, which was market value.
Geffen, who has officially retired from Hollywood in general and DreamWorks in specific, has been after a newspaper for a while. And he has long been close friends with Maureen Dowd, the star columnist at the New York Times.
In 2006, Geffen offered $2 billion to the Tribune Company for the Los Angeles Times, but the offer was rejected. Tribune — now in bankruptcy — said at the time that it did not want to sell off individual pieces of the company.
In 2007, after Sam Zell bought Tribune in a controversial deal that left the company with nearly $12 billion in debt, Geffen told the L.A. Times’ Michael Hiltzik that he would still like to buy the paper: "I think there is an opportunity for Tribune Co. of Chicago to maximize shareholder value" by selling him the paper.
The Times’ $1 billion-plus in debt forced it to take a loan from Mexican billionaire Carlos Slim worth $250 million earlier this year. The Times paid $4.5 million up front to borrow the money and will pay 14% interest.
Fortune.com published a story on Monday by former Times reporter Richard Siklos discussing the Geffen offer, and also reporting that Scott Galloway, one of two Harbinger board members, made an overture to Google co-founder Larry Page about Google buying the paper. Fortune says that Google looked seriously at the opportunity before deciding to pass.
The article noted:
– At the company’s annual meeting, Sulzberger Jr. reiterated the stance that his family is not interested in selling the Times, no matter how dire the financial situation and outlook.
– The steps the Times has taken since the beginning of the year — selling much of its headquarters, borrowing $250 million on steep terms from billionaire Carlos Slim, threatening to close The Boston Globe, putting its stake in the Boston Red Sox up for sale — are intended to keep the company solvent. The company lost $74 million.
— Among its pluses, the Times has managed to increase its print circulation revenue over the last couple of years. It has more than 830,000 print subscribers who have taken the paper for two or more years.
– The company is looking at every possibility of change: charging for some content via its Web site, publishing a less sprawling and comprehensive paper, maybe even less frequently, written and edited by fewer people and targeted at a narrower, even more elite, audience. For months, the Times has had two internal task forces comprised of journalists and business executives meeting weekly. One is looking at how the news operation would need to reconfigure under different scenarios, while the other explores every new potential revenue stream from new products like the Kindle and its ilk.