Does Southern California Need a Megapaper?

The LA Times, under the Tribune Company, is still working its way out of bankruptcy. The O.C. Register is supposedly up for sale. And who knows what’s happening with the San Diego Union-Tribune? The past few years have been brutal to all three papers–so why not join forces, argues The Deal‘s Richard Morgan.

This notion was unthinkable when the Chandlers ruled the Los Angeles Times, the Hoiles led The Orange County Register and the Copleys owned The San Diego Union-Tribune-but where are their respective papers today? In bankruptcy, recently out of bankruptcy and for sale, again, after a brief stint in the hands of private equity. …

“It’s what I call ‘The Paper’ — my umbrella term for what’s produced after all the publishers in the area get smooshed into one enterprise,” says Alan Bell, who in 2006 stepped down as the CEO of Register parent Freedom Communications Inc. after presiding over its most profitable era. “It’s the only way you can make a go of it in a region as spread out as Southern California is.”

Morgan argues that a SoCal megapaper isn’t just a grand idea, it could actually happen. Hedge funds Alden Global Capital and Angelo, Gordon & Co. LP  have stakes in both O.C. Register parent company Freedom Communications and Tribune Company. With Union-Tribune owners Platinum Equity possibly gearing up for a sale of that paper, a deal to consolidate the three papers isn’t unreasonable.

Then, of course, you’d lay off a bunch of reporters and ad folks, merge Washington and Sacramento operations as well as the ad folks working on the big national advertisers. Basically, you’d get rid of as many people as you possibly could. An interesting idea, but methinks the last thing any newspaper needs is to be taken over and consolidated under a hedge fund. As much as everyone wants to blame the Internet, the Reaganization of the newspaper business is what paved the way for the death of this industry.