An Effort to Thwart Sale of Papers to the Kochs
An effort by two conservative billionaires to take over The Los Angeles Times and seven other newspapers is setting off a firestorm of opposition here. Public employee unions, the leaders of the State Legislature and liberal advocacy groups are moving to block the sale, denouncing it as a threat to public workers and Democratic Party issues.
Ten public employee unions on Thursday sent a letter to the largest shareholder in the Tribune Company, which owns the newspapers, urging it not to sell to the billionaires, David H. Koch and Charles G. Koch. The Kochs have championed legislative efforts to cut public pension benefits and the power of public unions, notably in Wisconsin.
About one-quarter of the assets held by Oaktree Capital Management, the leading shareholder in the Tribune Company, comes from public employee pension fund investments, and labor leaders, looking to exert influence on Oaktree, signaled they would press to withdraw the funds if the sale went through.
"The sale of the Tribune Company's newspaper assets would provide the Koch brothers a powerful and influential platform by which to promote, at both the local, state and federal level, that enactment of their anti-public pension fund policies," the unions said in a letter to Bruce Karsh, who is president of Oaktree Capital Management and chairman of the Tribune board of directors. It said that the Koch brothers had a history of orchestrating efforts that are "anti-labor, anti-environment, anti-public education and anti-immigrant."
The prospect that the Koch brothers, notorious in Democratic circles for their heavy financing of conservative candidates and causes, could run The Los Angeles Times has struck a nerve in this liberal corner of the country. The Times, if somewhat diminished by the cuts it has suffered over the years, remains a powerful influence in public life here and its existence is integral to the modern history of Los Angeles.
The resistance is not only here. In Chicago on Wednesday, demonstrators protested outside the headquarters of The Chicago Tribune, which is also owned by the Tribune Company, about the possibility of a Koch takeover.
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The effort is at an early stage — no formal bids have been submitted — and the Koch brothers face competition from, among others, a team of Los Angeles business leaders, including Eli Broad, the philanthropist, and Austin Beutner, a business executive and former deputy mayor. Officials behind the campaign said they were moving quickly in hopes of discouraging the Koch brothers from proceeding with their plans, which come after an election campaign in which they spent millions of dollars in largely unsuccessful efforts to elect conservative candidates.
Melissa Cohlmia, a spokeswoman for the Koch companies, declined to comment on the protests. "We respect the independence of the journalistic institutions referenced in today's news stories, but it is our longstanding policy not to comment on deals or rumors of deals we may or may not be exploring," she said. A spokesman for Mr. Karsh also declined to comment.
The two Democratic leaders of the State Legislature — Darrell Steinberg, the president pro tem of the Senate, and John A. Pérez, the speaker of the Assembly — announced on Wednesday that they would oppose the sale. Both men control seats on the boards of California's major pension funds.
"Newspapers are public trusts, and I think it is wrong for The Los Angeles Times to end up in the hands of two people who have such a pronounced rigid ideology on a whole host of issues," Mr. Steinberg said in an interview. Mr. Pérez, in a statement, said he was "deeply concerned about media outlets being purchased to further a political agenda."
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A liberal advocacy group, the Courage Campaign, bought advertisements to run in The Los Angeles Times on Thursday urging readers to cancel their subscriptions if the Tribune Company agrees to sell the newspaper to "the right-wing Koch Brothers." More than 1,000 people have pledged to cancel their subscriptions, said Rick Jacobs, the head of the campaign. while 110,000 have signed petitions opposing the sale.
"The LAT has a long and storied past of publishers taking it in various directions," Mr. Jacobs said in an e-mail. "The Kochs are much more likely to end journalism as we know it. They are likely to stop coverage of climate change or skew it. They will almost certainly change the way the LAT covers state politics, especially ballot measures."
A red-on-black poster — "No Koch Hate in LA: Stop the Koch takeover of the L.A. Times" — went out on Wednesday urging people to turn out for a rally next Tuesday in front of Mr. Karsh's office here.
"The Koch brothers would use the newspaper in an extremist and ideological way," said María Elena Durazo, executive secretary-treasurer of the Los Angeles County Federation of Labor, A.F.L.-C.I.O. "And I'm saying that even though I believe the current L.A. Times is not particularly labor friendly."
Should the Koch brothers proceed with their efforts, and draw on their considerable financial assets to try to push rivals off the field, shareholders in the Tribune Company, including Oaktree and JPMorgan Chase & Company, might be hard-pressed to refuse a deal that would be seen as in the best financial interest of the company. The union leaders, in their letter to Oaktree, argued that the cost of selling to the Kochs, in the form of losing the investments of the pension funds, would be as fiscally irresponsible.
"For those people whose retirement savings are invested in public pension funds, selling the Tribune Company's newspapers to the Koch brothers so they could in turn use it to advance specific policies adverse to the retirement security of working people, would be akin to agreeing to selling your car to a buyer who you know wants to buy the car so they can run you over," the letter said.