Are Zell and Geffen in Talks For LA Times?

So reports CNN:

Chicago real estate mogul Sam Zell, tapped Monday as the buyer of media conglomerate Tribune Co., has already talked to entertainment mogul David Geffen about a possible deal for the Los Angeles Times, according to a published report.

The Washington Post reported the discussions. It quoted an unidentified source familiar with Geffen's thinking who said Geffen has spoken with Zell since Monday's announcement and is optimistic that he may gain control of the Times, either in a spinoff deal or a joint-venture partnership.

Zell's winning bid for the Tribune Company, parent company of the LATimes since 1999, was highly leveraged. His cash outlay was only $315 million, with the rest of the $8.2 billion deal covered by debt that includes an assumption of Tribune's $5 billion outstanding liabilities.

With the goal of reducing that huge debt, it's not surprising that Zell is looking to sell some parts of his acquisition pronto; he's not known as the Grave Dancer for nothing. The LA Times and the Chicago Cubs are rumored to be the first on the chopping block.

Geffen by no means has a lock on this. With a measly $25 million breakup fee, former rumored bidders Eli Broad and Ron Burkle may get back in the game with competing offers. As I've mentioned previously, any of this three owning the LA Times would be good news. It's about time my hometown newspaper's ownership returns to local hands. I'm keeping my fingers crossed.



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