Purchase of Baltimore Sun may be off
Maryland businessman looks to buy all of Tribune Publishing
A deal for a nonprofit backed by a Maryland businessman to buy The Baltimore Sun and its affiliates may be off — or at least stalled.
According to a report in The New York Times, the negotiations for Stewart Bainum Jr. to acquire Baltimore Sun Media from Alden Global Capital have “run into complications.”
Bainum had a “nonbinding term sheet” with Alden to acquire The Sun for $65 million as the New York-based hedge fund purchased the rest of Tribune Publishing’s stock for $17.25 a share. That deal, currently expected to close before June 30, would value Tribune at about $630 million.
Now Bainum may be organizing a competing bid for all of Tribune Publishing, which includes the Chicago Tribune, the New York Daily News and other major daily newspapers around the coun
try, according to the Times report, which cited three sources with knowledge of the matter.
The prospect of a competing bid didn’t send Tribune Publishing’s stock soaring Monday, but it did rise 24 cents to close at $17.28 a share, 3 cents more than Alden’s offer.
The negotiations between Bainum and Alden reportedly stumbled over the details of operating agreements for shared back office operations. Tribune Publishing performs numerous shared services across its newspaper properties, including finance, human resources, customer service, technology and design.
A representative for Alden could not be reached for comment Monday, and Bainum did not respond to a request for comment. Neither has spoken publicly about the preliminary deal since it was announced Feb. 16.
Alden offered Bainum a shared services contract for the Sun that would run five years, but the Maryland businessman balked at those terms, two sources familiar with what happened told The Baltimore Sun.
With those negotiations at an apparent impasse, Bainum has asked the special committee of Tribune Publishing’s board of directors for permission to be released from a nondisclosure agreement that prohibits him from discussing the deal, the Times reported. That would allow him to seek partners for a larger bid for all of Tribune Publishing, essentially competing with Alden, the three people told the Times.
A spokesman for the Tribune special committee, made up of its independent directors, said the committee had no comment.
The Times, citing two of its sources, reported Bainum was willing to put $100 million of his own money into purchasing Tribune and would need partners to come up with the rest.
Bainum, the chairman of Choice Hotels International, the Rockville-based parent of numerous hotel chains, is pursuing a decidedly different model than Alden for running newspapers, no longer considered part of a growth industry, said Karyl Leggio, a professor of finance at Loyola University Maryland.
Bainum’s plans for The Sun and its affiliates, including the Capital Gazette papers in Annapolis and the Carroll County Times, involved placing them into a nonprofit called the Sunlight for All Institute and running them for the benefit of the community. A lifelong Democrat and former state legislator, Bainum sees newspapers as critical to the functioning of the American republic.
Alden has grown over the past decade into a force in the newspaper industry, acquiring roughly 60 newspapers through its MediaNews Group subsidiary with the stated intent of saving them. Journalists and others, however, have criticized Alden’s cost-cutting tactics. Alden’s strategy typically results in layoffs of journalists and reduced local and community news coverage.
It’s possible Bainum has the means and connections to assemble a larger bid for Tribune Publishing, experts said, but he likely would face steep odds.
“Bainum is trying to buy local papers and keep them local,” Leggio said. “The challenge you have is if Bainum is looking to put up $100 million, he would need a lot of additional input from others, and it’s not an industry that has high returns. The likelihood that he’s able to line up a group isn’t that high.”
Such a strategy could involve persuading other wealthy individuals or local investors to purchase Tribune newspapers in their communities and set up similar nonprofit operations.
Bainum “could always increase his stake, but his interest is in the Maryland papers,” Leggio said. “Ideally, he would line up other investors like him, but he would have quite a coalition that he would have to build.”
Bainum made his fortune in both hotels and nursing homes, two family-run businesses started by his father and grown by him.
He and his wife, Sandy Bainum, a singer and actress, joined the Giving Pledge, a campaign seeking commitments by the world’s wealthiest people to contribute most of their wealth to philanthropic causes. Others who have made the pledge include Facebook’s Mark Zuckerberg and his wife, Priscilla Chan, Elon Musk, Michael Bloomberg, CNN founder Ted Turner, and, notably, Patrick SoonShiong, who acquired the Los Angeles Times and San Diego Union-Tribune from Tribune Publishing for $500 million in 2018.
If Bainum does launch a bid for all of Tribune, SoonShiong is among those he would need to convince because he still holds a 24% stake in the company. While Alden owns 32%, it can’t vote on its own deal, giving Soon-Shiong the power to hold up any Alden deal for Tribune.
A spokeswoman for SoonShiong at the Los Angeles Times could not be reached Monday.
One analyst said he would welcome the idea of local ownership for not only Baltimore Sun Media papers but other newspapers through the Tribune chain.
“It’s an exciting possibility ... if an Alden takeover can be stopped,” said Rick Edmonds, a media business analyst for the Poynter Institute, a nonprofit journalism school and research group. “But by the same token, I think it’s a little bit of a long shot . ... It depends on whether potential buyers come forward from their markets.”
Maryland men’s lacrosse coach John Tillman is taking the right approach. While a lot of fans are praising his No. 3 ranked and unbeaten Terps, Tillman simply says, “let’s wait and see.”
He knows the layout and the state of college lacrosse these days.
Maryland (4-0) is good in the Big Ten Conference, but the Atlantic Coast Conference seems to have the super teams.
“Honestly, we’re almost half through this thing, and to get the first four are huge,” Tillman said of the Terps’ schedule, which includes playing each conference team twice because of the coronavirus pandemic. “But knowing that three of those games were at home, that means we got a lot of work to do and going on the road is a lot harder.”
options would be without him at third base.
But Ruiz, who enjoyed pretty much everyday status at third base in 2020 after platooning with Hanser Alberto in 2019, should probably take it as a sign that it’s time to take that next step while he still can. Ruiz is a popular player in the Orioles’ clubhouse and by virtue of having played two seasons with the team is probably one of the most visible players to fans.
A move like this, however, would signal that the Orioles aren’t completely sold on more being in the tank for Ruiz.
A break from business as usual
To this point, the Orioles have relied on waiver claims and short-term free agents to paper over some of the gaps on their roster until young players they have tried to develop are ready to take over.
That’s why Dwight Smith Jr. was the regular left fielder until Mountcastle was deemed sufficiently prepared last summer, and why veterans such as Wade LeBlanc and Tommy Milone were in the rotation until the Orioles brought up Keegan Akin and Dean Kremer to take their places last year.
Absent prospects being ready, though, this isn’t a team that’s necessarily in the business of upgrades. Those playing well can be traded, but it’s rare for this version of the Orioles to go out and get a player who could be an upgrade over one of the rebuilding core they’ve gotten by with for so long.
With Ruiz having his moments but not totally taking hold of the job, the Orioles are taking a rare step (at least for a team with their chances of being competitive) of trying for a short-term elevation of their roster.
Another possible trade asset
Franco, with over five years of major league service time, would be the definition of a rental. He seems like a lock to reach six years of service time and thus free agency after this season, so the Orioles would only be on the hook for this year’s salary.
And though the Orioles’ best trade returns have come for players with more than one year of club control — think Dylan Bundy, Mychal Givens, and Miguel Castro — Franco is another player who could be attractive come the July trade deadline if he plays well.
It’s not likely the Orioles will get a big asset in return. But they’ve shown they value being able to supplement their growing Latin American prospect base with young players from other teams in these trades, and at the very least, moving Franco could at least allow them to do that.
It might be a case where the Orioles’ main trade talks will be around popular, more productive players such as Santander as the season progresses. But Franco, Freddy Galvis and maybe pitchers Félix Hernández or Matt Harvey could be easy to shop on the rental market.
A reminder that prospect status isn’t everything
After Franco debuted with the Phillies at age 21 in 2014, Baseball America rated him the 17th-best prospect in baseball. His career didn’t pan out as one would hope after such a lofty ranking.
His only season with an OPS over .800 came in an 80-game stint in 2015, and despite hitting over 20 home runs in each of the next three seasons, Franco failed to develop into a viable third baseman and didn’t do enough with his bat to cover for those deficiencies.
That’s how a player ultimately doesn’t get tendered a contract two years running, and remains available at this stage of the spring for a team like the Orioles to sign.
But for a team that has so much wrapped up in player development and building its own talent base, Franco’s own trajectory shows there are plenty of pitfalls between the promise of a young player and the actualization as a successful major leaguer.