Minnesota billionaire Glen Taylor has made a formal offer to acquire the Star Tribune, a purchase that would add the state’s largest media company to his diverse business empire.
Taylor said in an interview Tuesday that he has made a cash offer as an individual without any other investors. He declined to say how much he would pay, but he emphasized that the Star Tribune is the only media company he is pursuing.
“I’m interested in this one because it’s a Minnesota paper,” Taylor said. “For the long run, if we can continue to have a news media that’s consistent, fair, broad-based … I think it’s in the interest of our state. I would be proud to be part of that.”
Star Tribune Publisher and CEO Mike Klingensmith said Taylor’s possible purchase is an exciting prospect because it would give the company a long-term owner with deep roots in Minnesota. “I think both of those things are important,” Klingensmith said.
The Star Tribune and Taylor said Tuesday they have signed a letter of intent for a possible deal, pending the outcome of a 60-day review of the company’s operations. If that process goes well, both parties expect the sale to close by the end of May.
If the deal goes through, Taylor, 72, said he will not take on a managing role with the Star Tribune, although he might put a family member on its board of directors. The company’s current management would remain in place, Taylor and Klingensmith said.
Star Tribune employees, in a companywide meeting after the news was announced, broke into applause when Klingensmith said he would be staying.
Journey from bankruptcy
The sale would be a pivotal moment for the media company, which emerged from bankruptcy in 2009 with the challenge of reinventing itself for a digital audience while also keeping its print editions robust. Since then, the company has expanded its readership, stabilized its finances and striven journalistically, winning two Pulitzer Prizes in 2013.
“Right now, I think the Star Tribune has great leadership,” said Dan Sullivan, Cowles Chair of Media Management and Economics at the University of Minnesota. “They’re one of the real success stories in terms of major dailies today.”
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.
He heads Taylor Corp., a printing and marketing conglomerate based in North Mankato that he has spent decades building. It is among the country’s largest privately held companies and has annual sales of around $1.6 billion. He also owns scores of other companies as well as the NBA’s Minnesota Timberwolves and the WNBA’s Minnesota Lynx.
Taylor would be the latest billionaire to buy a major U.S. newspaper if he acquires the Star Tribune. Last year, Amazon.com founder and CEO Jeff Bezos paid $250 million for the Washington Post, and Boston Red Sox owner John Henry paid $70 million for the Boston Globe and other media properties.
Klingensmith noted that historically, most newspapers were founded by families and that the emerging trend is “kind of a return to the model.” The Star Tribune was owned for six decades by the Cowles family, who sold it in 1998.
The Star Tribune has emerged as an example of how to manage the difficult transition to news reporting across digital platforms while still producing a quality print product, said Ken Doctor, a news industry analyst at Newsonomics in Santa Cruz. He described a Star Tribune-Taylor alliance as “very positive news.”
“It’s unusual these days to have a local wealthy owner who is talking about maintaining, sustaining and, hopefully, building a local news company — as opposed to figure out [how] to keep the lights on and doors open,” Doctor said.
Despite ongoing challenges in print advertising, the Star Tribune has been “solidly profitable” in every year since its restructuring, Klingensmith said, characterizing the profits as consistently “in the eight digits.”
The company has reduced a significant amount of its debt, partly through the 2009 bankruptcy and more recently with the sale of five blocks it owned in downtown Minneapolis for $38.5 million. The land sale also cleared the way for new development next to the Minnesota Vikings football stadium now under construction.
Wayzata Investment Partners and GE Capital together own about 75 percent of Star Tribune shares. The remaining stake is owned by several dozen creditors and other investors. Taylor said his offer is for 100 percent of the shares.
Taylor is a Minnesota business legend. Raised on a dairy farm near the southern Minnesota town of Comfrey, he once aspired to be a math teacher but was sidetracked by a job in college working at Carlson Letter Service, a “job shop” printing company. He eventually bought the company from Bill Carlson in 1975 and turned it into Taylor Corp.
From 1981 to 1990, he served as a Republican state senator in the Minnesota Legislature.
Today, Taylor Corp. encompasses about 50 companies employing about 9,000 people. The bulk of the company’s revenue comes from printing and marketing.
Taylor also owns about 30 companies outside Taylor Corp. The largest is Rembrandt Enterprises, one of the country’s largest egg operations. More recently, he expanded into medical devices by buying a stake in Envoy Medical Corp., a White Bear Lake-based developer of an implanted hearing aid. Taylor also co-owns Northland Securities Inc., a Minneapolis brokerage.
Taylor said that Star Tribune Media would remain a stand-alone company but that he likes to have “various companies in my organization work together.”
“I understand that this is a difficult business,” he said, responding to a question about the challenges that newspapers face. “I’m in a lot of printing areas and they are all difficult business areas. I have just found out that if you’re the best in that area, then you can do quite well.”