In this segment from the MarketFoolery podcast, host Chris Hill and Motley Fool Funds' Bill Barker consider why Tronc(NASDAQ: TRNC)would even want to buy the company that runs its flagship's chief print rival in the Windy City. The newspaper industry in general is still not on solid ground as it transitions from a focus on print to digital, and Tronc isn't doing it as well as some of its rivals. Is there any benefit to this acquisition?
A full transcript follows the video.
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This video was recorded on May 16, 2017.
Chris Hill: Tronc is back in the news,theonline publishing company with one of the worst names in the public markets, theparent companyof theChicago Tribune. Tronc has signed a non-binding financial agreement to buy,I think I'm pronouncing this correctly,Wrapports Holdings, which is the parent companyof theChicago Sun-Times. So, theparent of theChicago Tribuneis looking to buy theparents of theChicago Sun-Times, whichbegs the question,why in God's name would they do that? It's not like Tronc hasbig piles of money sitting around.
Bill Barker:Economies of scale.
Hill:Really? That's why? And they're so sure of this move that they took the bold step of signing a non-binding financial agreement? This juststrikes me as,among other things, sad. Like,look, you want to go out and buy your rival newspaper? Go for it.
Barker:I really feel like Troncdid something personally to you, yourenmity toward them.
Hill:A lot of it has to do with the name.
Barker:Most of it. Almost all.
Hill:Almostall of it has to do with the name.
Barker:Some 90% has to do with the name, because theircrimes against you other than adopting the name Tronc arepretty limited, aren't they?
Barker:TheChicago Bulls have taken out your Celtics a couple times over the years.
Hill:Not this year. Honestly,here's what bothers me: As someone who has spent his adult life in various realms of the media world --
Barker:You'resort of an expert on the media.
Hill:I wouldn't say I'm an expert, but --
Barker:Listeners out there,by the way, this is the way to alwaysput somebody on the defensive. When you're looking for advice, just go like, "You'resort of an expert on ... " And thenimmediately, people -- non-Donald Trump people -- disclaim their expertise on almost all topics thatyou would approach them about, claiming they're an expert.
Hill:Goingback to Memorial Day weekend, which is coming up, this isabsolutely a great move to pull at abarbecue or a party at some point, when you'restanding with a group of people. Just like, "Jim, you'rekind of an expert on biochemistry. Let me ask you a question." And then just watch Jim's face.
Barker:Even if it's their job. But you are sort of an expert on the media.
Hill:Uh, I wouldn't --
Barker:See? There you go. "Uh ... "
Hill:Expert,I wouldn't go that far.
Barker:It'syour full-time employment.
Hill:Well that, yeah. But asI think we both know, just because you're fully employed in one job doesn't make you anexpert on that job.
Barker:That'swhat I'm saying.
Hill:Butin the case ofTronc,I guess I'm just bothered,among other things, beyond the name, I'mbothered because I am generally a fan of media. I appreciate when media is well done andwell executed and well managed. That'swhy it's great to see entities likeTheNew York TimesandThe Washington Postpull off -- at least,they appear to be in the process of successful pulling off -- thetransition from the printed newspaperbusiness to the digital business. The fact that Tronc is going about things in such a ham-handed way, I think, offends mysensibilities. And again, have some guts. You want to buy your rival newspaper? Do that. But don't come to me with this weak, "Well,we're going to sign this piece of paper, but we can get out of this, right? It's non-binding? Great, we'll do that."
Barker:Alright.I only brought it up today because I knewyou would like to vent. I don't have any realinsights on what they're up to today. InPhiladelphia, we had the experience of the two major papers being all under one roof. So it's not that unusualto me. We'll see whether it works. It may be the case that there just isn't room for two local papers ineven a market as big as Chicago. New York still does it. We'llsee for how long. But New York is kind of an entity unto itself. The normalrules of economics don't always apply there. What'sthe No. 2 paper in LA?I'm afraid I don't know it.
Hill:I believe it's theLA Daily News, but I was about to mention LA. InNew York City, you have theNew York Times,theNew York Post,andNewsday. TheLA Timesisso much bigger andmore relevant than theDaily News--sorry for anyone listening who may have someconnection to theLA Daily News. But, you can live in New York City, and there arelegitimate reasons to subscribe to all three of those newspapers. And I think, just from a smile standpoint, it'sgoing to be a sad day if theNew York Postever goes under. What's on thecover and the back cover of theNew York Post? I always want to know that.
Barker:There'sa lot of gold on those covers.
Hill:There's always gold.
Barker:There was a good one today.
Barker:Yeah.It was Leaker-In-Chief, wasn't it?
Hill:Yes, or maybe that was yesterday. Also, the back page at thePost, foranyone who's a sports fan, that's always a good one to check out.
Bill Barkeris an employee of Motley Fool Asset Management, a separate, sister company of The Motley Fool, LLC. The views of Bill and Motley Fool Asset Management are not the views of The Motley Fool, LLC and should not be taken as such. Billhas no position in any stocks mentioned. Chris Hill has no position in any stocks mentioned. The Motley Fool recommends The New York Times. The Motley Fool has a disclosure policy.