The Work

March 19, 2009 3:53 PM

Hughes Hubbard Advises on Another Media Deal

Posted by Brian Baxter

The San Diego Union-Tribune's parent company, La Jolla, Calif.-based Copley Press, announced on Wednesday that it had reached a deal to sell its flagship newspaper to a private equity firm for an undisclosed price.

Hughes Hubbard & Reed is advising Platinum Equity, a Beverly Hills-based PE firm that specializes in investing in distressed assets, on the transaction. The New York Times quoted a source familiar with the deal, stating that Platinum was the only bidder for the newspaper and that the acquisition price was "very low."

Several publishers have been forced to file for bankruptcy or shutter certain publications--particularly newspapers--in recent weeks amidst shrinking advertising revenues and a move towards online news sources.

Only two weeks ago Hughes Hubbard advised a group of investors that rescued The New Republic, which was being sold by Canadian conglomerate CanWest Global Communications only two years after it acquired total control of the Washington, D.C.-based political magazine. The San Diego Union-Tribune remained marginally profitable in 2008 despite the turmoil roiling the rest of the print media industry.

Hughes Hubbard is no stranger to high-profile media deals.

Last summer M&A partner Kenneth Lefkowitz--who also led on The New Republic deal--served as lead counsel to Cablevision on its $650 million acquisition of Newsday from the Tribune Company. Before that the firm advised Denver-based MediaNews Group when The Hearst Corporation purchased a $317 million stake in the company in October 2007.

San Jose-based newspaper publisher Knight-Ridder was also a longtime Hughes Hubbard client before it was acquired by The McClatchy Company in 2006 for $6.5 billion.

The firm assembled a 15-lawyer team led by private equity group cochair Ray LaSoya in Los Angeles to advise Platinum on the deal. The group included entertainment and media group cochair Rita Haeusler, employee benefits partners Javier Hernandez and Spencer "Jerry" Harrison, labor and employment partner Marshall Babson, environmental partner Susan Campbell, real estate counsel George Furst, technology and media counsel Wayne Josel, e-discovery counsel Ross Lipman, and associates Jason Reese, Brian McEvoy, Cindy Lo, Erin DeCecchis, Meredith Stead, and Josiah Trager.

Munger, Tolles & Olson corporate partner Mark Kim and associate Brian Duff advised Copley on the transaction. The San Diego Union-Tribune had been up for sale since July 2008.

For its part, Hughes Hubbard is looking at the changes in the media industry as an opportunity. Daniel Schnapp, chair of the firm's new media, entertainment, and technology practice, recently advised Viacom's MTV Networks on a partnership with News Corporation's MySpace.

And a Hughes Hubbard spokeswoman says that the firm continues to expand its entertainment and media practice, with former Irell & Manella IP group cochair Clark Siegel joining the firm this week.

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