(Bloomberg) -- If this publishing thing doesn't work out, newspapers may have a future in real estate.
The owner of the Los Angeles Times and Chicago Tribune said Monday it wasn't only buying the New York Daily News, but also a stake in a joint venture that will own a 25-acre (10-hectare) parcel of land on which its printing facility is located and which overlooks the Manhattan skyline.
It wasn't enough that Tronc Inc. bought a storied New York City tabloid for just $1. A Tronc executive told the Chicago Tribune the land was “an added inducement to this transaction.” With print advertising in a downward spiral ever since the internet became a commercial force, newspapers have seen the value of their once-formidable brands dwindle.
In many recent newspaper deals, including this one, “it is the property that offers calculable value and drives the deal,” newspaper analyst Ken Doctor wrote on TheStreet.com.
It's not the only example of newspapers exploring the real estate market:
- Tronc journalists saw the buildings where they work in Chicago and Los Angeles get sold last year, though their former parent company, Tribune Media Co., owned them and got the proceeds.
- The New York Times is vacating and subleasing at least eight floors of its headquarters building in Manhattan to find more sources of revenue.
- The Boston Globe last month struck a deal to sell its former offices in Dorchester, Massachusetts, to a local developer.
- The Dallas Morning News' owner, A.H. Belo Corp., said on a recent earnings call that it's selling two parking lots and a park in downtown Dallas.
To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net.
To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Daniel Taub
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