A prominent San Diego real estate developer said Thursday that he agreed to buy the city's dominant newspaper, marking the publication's second ownership change in less than three years.
Doug Manchester agreed to pay more than $110 million, said John Lynch, a longtime local radio executive who was hired by Manchester to help run the 143-year-old San Diego Union-Tribune. The Wall Street Journal has reported that Platinum Equity LLC paid less than $50 million for the newspaper in 2009.
The transaction is expected to be completed by Dec. 15.
Manchester, who likes to be called "Papa Doug," often has been the subject of the newspaper's stories, including a front-page piece this month on the California Coastal Commission giving a cold shoulder to his plans for a $1.3 billion hotel and office complex on the city's downtown waterfront. He has been a key player in the city's downtown renaissance.
Politically conservative, Manchester, 69, donated $125,000 to a successful 2008 campaign to ban gay marriage in California. His efforts to pass Proposition 8 sparked a boycott from some gay rights activists at his Manchester Grand Hyatt hotel, whose twin towers are among the downtown skyline's most recognized buildings. He since sold his interest in the hotel.
"We look forward to building on the foundation that has been established by current management and ownership, serving the community and working towards a fully integrated digital and print news media platform," Manchester said in a statement.
Lynch said in an interview that Manchester had no plans for big changes at the newspaper and that it would stay put at its sprawling office and printing plant in the city's Mission Valley area, where it sits amid a slew of hotels and next to one of the region's most popular shopping malls. He said the newspaper is "quite profitable" but declined to be more specific.
"We believe it's a very vital business and it ought to be in the hands of local San Diegans," Lynch said.
The Union-Tribune was Platinum's first foray in the newspaper business. The Beverly Hills-based investment firm slashed newsroom staff while focusing on local investigative reporting and technology upgrades.
Platinum bought the newspaper from the Copley family, which owned it for three generations. Ira Copley, an Illinois businessman, bought The San Diego Union in 1928. The Union, a morning newspaper, merged with Copley's afternoon paper, the Evening Tribune, in 1992.
The Union-Tribune is the nation's 25th-largest newspaper, measured by print circulation, according to the Audit Bureau of Circulation figures for the six-month period that ended Sept. 30. Its average daily circulation was 219,347.
Platinum, which is known for buying distressed companies and selling them after a few years, said in July that it hired New York investment firm Evercore Partners to explore options including acquisitions, partnerships or a sale. The move came at a turbulent time for Southern California newspapers.
Tribune Co., owner of the Los Angeles Times, is working on a reorganization plan after a Delaware judge last month rejected its proposal to exit bankruptcy. Freedom Communications Inc., which exited bankruptcy last year, is seeking strategic options for its properties, which include The Orange County Register. MediaNews Group Inc., which owns nine newspapers in the region, is consolidating operations.
Manchester has long evoked strong opinions in San Diego, going back decades to his support to build a downtown convention center and a failed effort to move the downtown airport to Miramar Marine Air Corps Station. The San Diego native is an active local philanthropist.
"He is one of the wealthier, more established players in San Diego politics and in the San Diego economy," said Dean Nelson, a journalism professor at Point Loma Nazarene University in San Diego.
Nelson said he was "initially concerned" by parallels to Sam Zell, who saddled the Tribune Co. with $13 billion in debt. Both Zell and Manchester were wealthy developers and newcomers to the newspaper business.
Steven Erie, a political science professor at University of California, San Diego, said it was a "very sad day."
"He has a lot of enemies in this town," said Erie, who studies San Diego politics. "He is controversial, he's litigious ... It'll be all the news that he sees fit to print."
Nelson said he was mystified why Manchester would by a newspaper that has criticized him in the past, but he cautioned against a rush to judgment.
"If he's smart, what he'll do is create some layers so that he would be an owner but still be covered as a newsmaker," he said. "There would be enough layers so the journalists will treat him the way they did before."
Lynch said he hasn't had any substantial discussions with Manchester about potential conflicts in how the newspaper covers its new owner, but he dismissed those critics as "petty and jealous."
"His vision in wanting to do this is he's concerned about San Diego and our country, and he wants to have a voice to turn it around," he said.