Mankato billionaire Glen Taylor finalized his purchase of the Star Tribune Monday, marking a new era for Minnesota’s largest news organization.
The media company will once again be owned outright by a Minnesotan, 16 years after the Cowles family sold it to one of the nation’s largest newspaper chains.
The Star Tribune joins Taylor’s vast holdings of more than 80 businesses worldwide, including the Minnesota Timberwolves, the WNBA’s Minnesota Lynx, and dozens of companies in printing and other industries.
“The Star Tribune is not only a good business, it’s an important institution for all Minnesotans,” Taylor said. “Our state and the region benefit from the presence here of a strong journalistic enterprise.”
Terms were not disclosed, but Taylor has put the price near $100 million. He will personally own 100 percent of the Star Tribune; it will not be under the Taylor Corp. umbrella.
Taylor, 73, has said he will not take a managing role, though he will appoint his daughter Jean Taylor to the board of directors. The company’s current management, including Publisher Michael Klingensmith, will remain in place. Taylor plans to meet with employees on Tuesday.
“It is the company coming full circle back to the days of private Minnesota family ownership,” Klingensmith said Monday.
The sale is a pivotal moment for the Star Tribune, which emerged from bankruptcy in 2009 with the challenge of reinventing itself for a digital news audience while also publishing a compelling print edition. Since then, the company has expanded its digital and print readership and stabilized its finances. The newspaper won two Pulitzer Prizes in 2013 and holds the seventh-largest Sunday circulation in the nation.
The company has eliminated the majority of its debt, partly through the recent $38.5 million sale of five blocks it had owned in downtown Minneapolis. The land deal cleared the way for a $400 million office tower project near the under-construction Vikings stadium. In 2015, the newspaper will leave its home of nearly 100 years and move into the Capella Tower complex.
Klingensmith said the direction and operations of the company will be largely unchanged by Taylor’s ownership.
“We will still have to very much live within our means as a stand-alone Taylor-owned company, so I don’t expect a great deal to change,” he said. “One aspect that will be new is that we will have more flexibility to look at … modest acquisitions that might fit within our strategy, particularly in digital.”
Asked Monday whether he is also interested in purchasing the St. Paul-based Pioneer Press, Taylor said it is something he would consider. “If they decide to sell it at some time, obviously we would be interested, but I don’t have any knowledge of that, or any reason to believe what that time table might be,” he said.
Taylor is the latest billionaire to buy a major U.S. newspaper. Amazon.com founder and CEO Jeff Bezos paid $250 million for the Washington Post in early October. Boston Red Sox owner John Henry closed his $70 million deal for the Boston Globe and other media properties later that month.
Taylor said he would like to see the paper offer more robust coverage of all of Minnesota and broaden readership.
“When I was a young person, and we lived on the farm, boy, I’ll tell you a lot of people got the Tribune ... and I don’t want us to end up [as] a Minneapolis or suburban paper,” said Taylor, who grew up in Comfrey, a town 50 miles west of Mankato. “I think it should be a statewide paper, and anything I can do to support that, and help in that area, I’m going to do that.”
R.T. Rybak, the former Minneapolis mayor and one-time Star Tribune reporter, said Taylor’s purchase of the newspaper demonstrates that he is committed to making Minnesota better, but also that he’s a “shrewd business person.”
“I believe he’s in this Star Tribune acquisition for the right reason — he sees a business there,” Rybak said.
The Star Tribune has 1,000 employees, and Newspaper Guild co-chair Mike Kaszuba said in a statement that he hopes Taylor recognizes and respects “the long history of cooperation and sacrifice” from the company’s unionized workers, who accepted pay cuts and other benefit reductions during its bankruptcy.
“We welcome having a local owner in Glen Taylor, and hope to work with him as the Star Tribune embarks on a new era in meeting the challenges facing newspapers,” Kaszuba said.
Taylor is one of several Minnesotans on the annual Forbes list of the wealthiest Americans and has an estimated net worth of about $1.8 billion. His Taylor Corp., based in North Mankato, is among the country’s largest privately held companies and has annual sales of around $1.6 billion.
He said his down payment for the company is more than 25 percent of the total price. The amount was dictated by his analysis of the company’s budget over the next five years.
“If we just do what the management team says that they’re going to do, we will have no trouble paying any debt payments,” he said Monday. “We’ll get the thing paid off in less than 10 years.”
In 1998, McClatchy Co. bought the Star Tribune from the Cowles family for $1.2 billion. When Avista Capital Partners bought the company from McClatchy in 2006, the price had fallen to $530 million. That deal saddled the company with debt just as the Great Recession hit, contributing to its financial woes.
Of the previous owners, Wayzata Investment Partners and GE Capital together owned about 75 percent of the company. The rest of the stock was owned by several dozen creditors and other investors.
Klingensmith on Monday thanked them for their “excellent stewardship” over the past four years. “We could not have asked more from them as owners, including their help in securing our new ownership.”