L.A. City Councilmen Would Divest Pension Money From a Potentially Koch-Owned Tribune Co.

Eli Broad, demonstrating his commitment to empirical journalism. |||It is instructive to watch the superstructure of liberalism wheeze into gear at the mere rumor of a right-wing-bogeyman purchase of a distressed, unloved newspaper company:

Three Los Angeles City Council members -- including a candidate for mayor -- asked their colleagues Tuesday to consider pulling city pension money from the investment firms that own the Los Angeles Times if they sell the publication to buyers who do not support "professional and objective journalism." [...]

"Frankly what I hear about the Koch brothers, if it's true, it's the end of journalism," said [Councilman Bill] Rosendahl, a former broadcaster. "I don't want to see Los Angeles, the second-largest city and the biggest region in the nation, not to have a quality newspaper."

Rosendahl's motion calls on the council to support a buyer who has demonstrated "the highest terms of professional and objective journalism." It also calls for a report on how the city can use its pension funds and other investments as leverage to achieve that goal.

"We cannot support the sale of the Times to entities who Times readers would view as a political transaction first and foremost, turning L.A.'s metropolitan daily into an ideological mouthpiece whose commitment to empirical journalism would be unproven at best," Rosendahl wrote in the motion.

Austin Beutner, local Democratic politician, is totally not interested in turning the L.A. Times into an ideological mouthpiece. ||| Walter MooreWalter MooreAs I mentioned in my HuffPost Live appearance on the topic last night, it's striking how this concern over the unproven "commitment to empirical journalism" somehow does not apply to potential buyers who happen to be heavy in both Democratic and (unlike the Kochs) local politics. As Kathleen Miles reported this week at The Huffington Post,

The ownership that most Angelenos seem to favor is a coalition of LA billionaires who have expressed interest, led by former Democratic mayoral candidate Austin Beutner and including prominent Democratic donor Eli Broad.

Broad is not just any Democratic donor; he's a real estate developer (long the the most hated descriptor among newspaper purists in sprawling SoCal), a committed corporatist, and the most leveraged high-culture philanthropist in Los Angeles. He has so much skin in the game, from shaping local education policy to throwing lavish inaugural parties for President Barack Obama, that during my tenure on the L.A. Times editorial page he was commonly referred to around the office by just his first name. "Where's Eli on this?"; that kind of thing.

And yet, as Miles reported, here's what happend when columnist Steve Lopez asked his colleagues what they'd do under various ownership scenarios:

"Raise your hand if you would quit if the paper was bought by Austin Beutner's group." No one raised their hands.

"Raise you hand if you would quit if the paper was bought by Rupert Murdoch." A few people raised their hands.

Facing the elephant trunk-on, "Raise your hand if you would quit if the paper was bought by the Koch brothers." About half the staff raised their hands.

When I worked there, I used to enjoy the looks on people's faces when I said stuff like "Yeah, it'd be kind of awesome if Rupert Murdoch bought the paper." ||| newser.comnewser.comRemarkable, isn't it? The staff (at least according to this unscientific poll) would prefer a massively conflicted local Democratic heavyweight with zero experience in journalism over even one of the most successful (if deservedly controversial) newspapermen on the planet.

Anyway, the City Council story is one of many reasons why politicizing pension funds is a bad idea. And this whole sale-rumor story is turning out to be an interesting exercise in smoking out the interests and fears of a deep blue city in decline mode. As LA Observed's Kevin Roderick pointed out, the head of the Courage Campaign, which is spearheading efforts to block Koch ownership of Tribune, "happens to be running an independent expenditure committee promoting Garcetti's campaign for mayor." That would be the same Garcetti just endorsed for mayor by the L.A. Times. The important thing here is to make sure things around Spring Street don't get too political. 

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  • DJF||

    So they are threatening to lower stock prices so that Koch can buy at a cheaper price?

  • Brett L||

    Stop othering them with economics!

  • Pro Libertate||

    Huh, viewpoint discrimination. That violates something. . .something old.

  • Auric Demonocles||

    Pro lib, it offends you, it doesn't violate you.

  • Pro Libertate||

    No, something much older than me. Crap what's it called again? Oh, yes, the Mayflower Compact.

  • LTC(ret) John||

    The Magna Carta?

  • Pro Libertate||

    No, too recent. The Twelve Tables?

  • Austrian Anarchy||

    It is just like rape. Ask that Judd gal, the one from Tennessee running for Senate in Kentucky.

  • Brutus||

    Nonsense, I have it on Jesse Jackson's authority that it's just like Selma.

  • Winded||

    This concern trolling about who should be buying newspapers reminds me of the 80s when the Japanese were overpaying for USA real estate. I don't think I ever heard a seller complain, it was always people who had no desire to make the purchase but just had to insert themselves in the transaction.

  • Ron||

    and nobody cried when the Japanese had to sale that property, often back to the original seller at a third of the price they paid once Japans economy stalled.

  • wareagle||

    "I don't want to see Los Angeles, the second-largest city and the biggest region in the nation, not to have a quality newspaper."

    Bit late for that, isn't it? What's particularly telling is that this Council member is a former media guy. Bias; what bias?

  • UnCivilServant||

    So when are they going to import a quality newspaper? Or rather, invent one.

  • robc||

    the OCR?

  • Austrian Anarchy||

    I am sure the city and county have the resources to publish their own, with whatever news they feel is worthy. They could distribute it free to every address in the area.

  • BakedPenguin||

    Anyone else think the Kochs may be trolling these idiots? It's not like newspapers have been a good investment for a while. 'Yeah, sure, we want to buy that business that's hemorrhaging money.'

  • Brett L||

    I figured the LAT must have some prime real estate. (I believe the NYT's net is less than the worth of its real estate, so Carlos Slim got a deal.)

  • Ron||

    Notice how the left never says anything about the fact that a Mexican national owns half of NYT but they constantly scream about how some oil sheiks may own a small part of FOX

  • ||

    Technically Pinch still has the final word on NY Times, even though his family owns less than 12% (but does own most of the important voting stocks). Carlos Slim didn't get the vote, but he does get a cut of the proceed if they ever decided to divest the real estate profilo.

  • John||

    If you think Carlos doesn't get some influence in return for his money, I have a bridge to sell you.

  • BakedPenguin||

    That would explain the real estate guy in the other group, especially after CA ended the Eminent Domain Property Theft bureaus or whatever they were called.

  • LTC(ret) John||

    "Eminent Domain Property Theft bureaus or whatever they were called."

    Your name is much more truthful than Community Redevelopment Agency.

  • ||

    I'd love to see them buy it and then immediately shut it down on principle.

    No paper being better than the trash currently operating.

  • Eduard van Haalen||

    "Rosendahl's motion calls on the council to support a buyer who has demonstrated "the highest terms of professional and objective journalism.""

    Someone who, if this motion passes, will have the support of the local political power structure in LA. What better way to measure objectivity than the fact that the city's political class votes its endorsement!

  • ||

    Why is this a bad thing?

    The Kochs could buy the paper, and they wouldn't even have to fire half the staff. All the uber-progtards would leave voluntarily and the Kochs would be free to replace them with libertarians. What better way to wipe the slate clean?

  • Bardas Phocas||

    They won't quit. You know it.

    "I won't work for the kochtopus! I'll go work for the many other prosperous newspapers in Southern Cal.
    Wait! No! I'll start my own. Yes, printing words and shit on cheap paper and selling ads! That's the ticket to riches in these heady 21st century days!"

  • LTC(ret) John||

    They would wait to be fired, then unleash a torrent of lawsuits alleging everything from "discrimination based on trans-sexuality" to "Psychic injury because of evil KKKorporatness".

  • ||

    Years ago I found that I could link Reason articles to non-likeminded people and they'd more often than not read them, not being familiar with it or just knowing it as "that libertarian news site" or whatever.

    Now thanks to ThinkProgress et al. banging the Kochtopus drum nonstop, I get quite a lot of outright refusal to even look at pieces.

  • Invisible Finger||

    That is known as "willful ignorance". And "childish".

  • LTC(ret) John||

    Invincible Ignorance, as a theologian might call it.

  • John||

    So now being a Libertarian is just like being a part of Apartheid South Africa and should be treated as such. The mask hasn't slipped, they threw it in the trash.

  • Pro Libertate||

    It's that NOVA funding. Fucking right-wing extremist programming.

  • ||

    Interesting that I never once heard a complaint about all the PBS funding the Kochs do.

    Also interesting that I have never seen one of Soros's orgs sponsor anything on PBS. Nor Buffett. Nor Michael Moore.

  • Pro Libertate||

    Wrong thinking is punishable. Right thinking will be as quickly rewarded. You will find it an effective combination.

  • Bardas Phocas||

    The Kochs are buying indudulgences for their many-many sins.

  • Pro Libertate||

    That's certainly one way of looking at it. Another is that bogeymen are fictional.

  • AuH20||

    While this is most likely sarcasm, you seem new so it might not be.

  • Bardas Phocas||

    Martin Luther was upset becuase he didn't get a tote bage with his purchase.

  • ||

    It's refreshing that they aren't bothering to even try and hide their prejudices any more. This isn't just TEAM bullshit, this is polarization. The kind where they're talking about taking legal action to stop a market purchase based on the perceived political stances of the purchasers. Think about that. Think about where that leads.

  • Pro Libertate||

    And it's completely illegal for government at any level to take action based on the viewpoints of citizens.

  • John||

    That didn't stop Tiny Dancer and Mumbles Menino from waging war on Chick Fila. These people are no longer kidding around. They are straight up totalitarians. Politics is now everything. If you don't hold the proper politics, you cannot work or run a business or participate in society in their view.

  • ||

    "Illegal", ProL? What does that even mean? We don't live under the rule of law, so it's really kind of moot, isn't it?

  • Pro Libertate||

    I'm just keeping a log for statistical purposes. Kind of like tracking baseball stats.

  • John||

    Yup. The whole point is to make such that if you don't tow the party lion and support the team, you don't get to publish a newspaper or speak really at all.

  • JD the elder||

    Remember, the Red Scare was bad, and blacklisting was bad. Selling off investments in companies controlled by people with politically undesirable views is good, though, because...uh, because...shit, I can't even think of anything clever to say, other than, "Yes, much of the modern American left really does think conservatives are worse than Soviet Communists."

  • Brutus||

    They're worse because of their politics, not their methods. Think about the methods the Left condones and know I speak the truth.

  • The Late P Brooks||

    "Frankly what I hear about the Koch brothers, if it's true, it's the end of journalism,"

    Too late, dude. You should get out more.

    "Journalism" as practiced by Clark Gable and Rosalind Russell is as dead as the Dodo.

  • H. Protagonist||

    Given Wendy Gruel's wholesale whoring of herself out to the public employee unions, I was going to vote for Garcetti.

    Not anymore. Leaving that race blank. Douchebag.

  • Brandon||

    Vote for me. That's what i always do.

  • FreddyB||

    Why would the Kochs buy the organization? Wouldn't it be easier and cheaper to start their own? If they buy the Tribune they'd be starting with a mutiny. Why do it the hard way?

  • ||

    I'm thinking they're more interested in the assets of the LAT (real estate, etc.) than the publishing of the actual paper.

  • John||

    Probably. But they might also look at the British Newspapers and think that there is still money to be made in the newspaper business if you do it right.

    American newspapers are so uniformly bad, boring and dogmatic, a good one might make a killing.

  • Zeb||

    Or a really unappologeticall bad one, a la Daily Mail.

  • AuH20||

    You are unfamiliar with the New York Post I take it then?

  • John||

    And if I am not mistaken, The Post makes money.

  • AuH20||

    One thing I miss about living in CT is the New York Post covers. Especially the sports related ones when a NY team isn't doing to hot.

  • John||

    Depends on your view of "bad". The Daily Fail is always entertaining and is absolutely fearless in what it covers. It may not always get everything right. But I will take that over boring, earnest dogmatism every day.

  • AuH20||

  • John||

    You mean trying to satisfy your customer rather than endlessly pushing the same tired ideology is the key to making money in the newspaper business? Who would have ever thought such a thing?

  • geekster||

    To crush your enemies, to see them driven before you, to here the lamentations of their councilmen.

  • LTC(ret) John||

    "What is best in business, Conan"?

  • Killazontherun||

    Councilmen don't make for good rape conquests. Too much crying, dissmay and shitting their pants.

  • Zombie Jimbo||

    From FreddyB

    "Why would the Kochs buy the organization? Wouldn't it be easier and cheaper to start their own? If they buy the Tribune they'd be starting with a mutiny. Why do it the hard way?"

    Because they are EEEEEEEVILLLLLL!

    If enough of the current employees don't quit, they will start cutting out hearts. With a spoon.

  • The Late P Brooks||

    In a sane world, the beneficiaries of those retirement programs would storm these clowns' offices and hurl them from the roof naked and shrieking in terror.

  • Bill Dalasio||

    Why would they. The pensions in question are for city workers. They're in on the scam. The ones who should be storming the offices are the city's taxpayers. They're the ones who will have to make up the inevitable shortfall.

  • caseym54||

    A better question is "Why does the LA City Council have pension money invested in a Chapter 11 firm?" It couldn't be a bribe to keep the paper from criticizing them too harshly, could it? And, after all, if they lose the money the taxpayers will just pony up some more.

  • John||

    That is a great point. What fund manager thinks it is a good idea to invest in Newspapers?

    I would suspect that is nothing but a pay off to the Times. I mean come on, it is not like the Times hasn't done things like ignore the Mayor cheating on his wife with a local newsbabe or anything.

    Gee, maybe the LA pension funds buying their stock had something to do with that. Or am I just being cynical here?

  • Bill Dalasio||

    Actually, you can make VERY good returns investing in bankrupt companies. If you're at the right place in the capital structure you are able to get a stake in the successor company at a deep discount.

  • John||

    You can. But you buy the stock late not early when its price is still high.

  • Bill Dalasio||

    Well, actually, you don't buy the stock at all. You buy up the debt at a deep discount and get it converted to equity later in the process. From what I can tell, the funds in question acquired TRB in bankruptcy. This is their exit strategy.

  • Bill Dalasio||

    I should add that this is precisely why the fund managers in question will tell LA to go pound sand if the Kochs' offer is halfway decent. If they turn down a better offer to satisfy LA politicians' preferences, they put themselves in a lousy position in bankruptcy negotiations (with other investors and the courts).

  • geekster||

    "Frankly what I hear about the Koch brothers, if it's true, it's the end of journalism," said [Councilman Bill] Rosendahl, a former broadcaster. "I don't want to see Los Angeles, the second-largest city and the biggest region in the nation, not to have a quality newspaper."

    "And by God I'm not going to wait to find out if it's true before I open my pie hole," Rosendahl then said. "It's my obligation as a politician to jump to conclusions and make unfounded allegations, not to act rationally or deliberately."

    I'm sure the quote left that part out.

  • Zeb||

    I'm very curious what he hears about the Kock brothers.

  • ||

    They are libertarian. Isn't that enough?

  • geekster||

    They eat babies and wash them down with the blood of old people and the poor. They personally financed the Nazis. John Henry didn't die after winning the race against the steam hammer; he was murdered by the Koch's for being in a union.

  • Bill||

    I did not know about the last one. John Henry's death always seemed a bit suspicious.

  • Fatty Bolger||

    Facing the elephant trunk-on, "Raise your hand if you would quit if the paper was bought by the Koch brothers." About half the staff raised their hands.

    That would be an awesome scenario for the Kochs. Though you know those cowards are full of shit, they won't be quitting no matter who buys the paper.

  • John||

    Like I said last night. They will be all ready to quite right up until the moment someone explains to them you don't get unemployment if you quit your job.

  • ||

    "We cannot support the sale of the Times to entities who Times readers would view as a political transaction first and foremost, turning L.A.'s metropolitan daily into an ideological mouthpiece whose commitment to empirical journalism would be unproven at best," Rosendahl wrote in the motion.

    BBWWWWWWWWWWWAHAHAHAHAHAHAHAHAHA

    *gasp

    BBWWWWWWWWWWWAHAHAHAHAHAHAHAHAHA

    *choke

    BBWWWWWWWWWWWAHAHAHAHAHAHAHAHAHA

    *lightheaded, dizzy, passes out

  • John||

    CaseyM54 called it above. What the hell is a pension fund doing investing money in a business that has been headed to chapter 11 for years? It makes no sense.

    What is going on here is the City used the pension fund to buy off the LA Times. If the Koch Brothers buy the Times, the deal if off and someone might actually start covering City Hall again.

  • AuH20||

    Man, I hope after all this shit the Kochs add another 100 million dollars to their offer.

    I mean, if its in bankruptcy, and the board chooses an offer lower than the Kochs for political reasons, the creditors can tan their hide for screwing them over. Is this a correct understanding of bankruptcy laws?

  • John||

    The trustee has a duty to the creditors to take the highest offer. If the trustee doesn't take the highest offer, the creditors can appeal his decision to the bankruptcy judge and after that to the District Court and eventually the Appellate Courts.

    This would be a slam dunk case. This is no different than if a business went broke and the current owners life long enemy showed up and made the highest bid but trustee took a lower bid because the current owner just didn't want to see his business in the hands of the high bidder. Well, too bad. If you want to choose the next owner of your business, pay your creditors and don't fall into bankruptcy.

  • AuH20||

    As I understand, the Kochs will buy all the tribune papers, wheras everyone else wants just the LAT. So, as the board, do you have to sell the whole kit to the Kochs or could you pull some shenanigans and say that an individual bid was higher for the LAT specifically?

    I mean, I would guess not, as the Kochs also want the LAT and are only taking the others on if they get that, but still.

  • John||

    That depends on which entity is in bankruptcy. If it is just the LAT, then the trustee has no jurisdiction over the Tribune Company as a whole. If the whole Tribune company is in Chapter 11, you would have to have an odd set of circumstances to make it in the best interest of the creditors to just sell part of it when you have an offer for the entire business.

  • robc||

    If they could prove they have piecemeal offers greater than the offer for the entirety, then they could.

    But, yeah, rare and odd.

  • John||

    That is possible. But the problem is that that takes time and time is money. And just because you have a high offer for the LA times, doesn't mean you will get high offers for the other parts.

  • Ted S.||

    This would be a slam dunk case.

    Tell that to the people who got screwed over by Government Motors.

  • Brutus||

    Word. It's Rand's world, we just live in it.

  • Irish||

    According to Forbes:

    There’s no question Charles and David Koch can afford to buy Tribune’s papers. Financial information disclosed as part of a long-running dispute over the estate of oilman J. Howard Marshall suggests the brothers take home at least $500 million a year in dividends, even after reinvesting 90% of the company’s profits back in the business. David Koch has pledged or given away $1 billion to charity, including a $100 million gift to New York-Presbyterian Hospital this month. They put down $8 billion in cash on their $21 billion purchase of Georgia-Pacific in 2005.

    Those RIGHT WING MONSTERS! They reinvest 90% of the profits, thus providing people with jobs? David Koch gave away $1 billion to charity this MONTH and a hundred million dollars to a hospital?

    Have they no shame?

  • John||

    They just use their charitable donations to hide their underlying evil. Good people like George Soros don't give to charity because they have no evil to hide.

  • AuH20||

    Exactly John. This is why Mitt Romney gave more to charity than Barrack Obama. Because he is evil.

  • Killazontherun||

    You can tell the goodness in Obama's heart by the fact he never gave more than 1% of his income to charity before the 08 race kicked into gear.

  • ||

    Ah, but what charities did they give to?

    No doubt evil ones.

  • Kurt||

    "Raise your hand if you would quit if the paper was Tony Pierce sent you an email instructing you not to blog about John Edwards."

  • Kurt||

    Edit fail.

  • J H Dove||

    So if it might challenge you *at all* it's not "quality."

    Matt Welcf for E.I.C. after The Big Takeover.

  • ||

    They should buy it at least so there will be an alternative viewpoint whenever something like the Hakkens case happens.

    If for no other reason, do it for parents who have had their children seized because they smoke marijuana. Do it to defend all the people whose lives have been destroyed by bad laws.

  • ChrisO||

    I work in media. Trust me, *nobody's* quitting a paying newspaper job these days, regardless of who owns the paper.

    More likely, the Koch brothers would be passing out a nice bunch of pink slips should the acquire the LAT.

  • RickCaird||

    Jobs are so plentiful and easy to find in the newspaper business, that I am sure the half of the guys who would quit if the Koch brothers bought them would have no trouble getting a new job.

    It is much easier to raise your hand and say you might quit than it is to actually put yourself on the street.

  • CosmicRay||

    Hmm...owning any stock in the LA Times is already a breach of fiduciary responsibility. My expectation is that a more conservative LA Times will pick up a lot of business, and divesting the stock would be a breach of fiduciary responsibility. Well, the LA City Council might as well keep doing what they do best!

  • caseym54||

    It should be pointed out that Bill Rosendahl was a fervent Kucinich supporter in 2008, just in case you were wondering about his leanings. Eventually he settled for far-to-his-right Obama.

  • caseym54||

    As for the staffers who would quit if the Kochs bought it, they would be the ones you'd want to get rid of anyway. Not they would really quit -- where would they go?

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