Saturday, February 28, 2009

Tucson Citizen Sale. The Department of Justice is Curious.

Because I wanted to nail down the details of Gannett’s sale of the Tucson Citizen I went right to what I hoped would be the horse’s mouth: Robert J. Broadwater.

Broadwater is the managing director of Broadwater & Associates. I e-mailed him asking to be sent any boilerplate he might have, outlining the details of the sale. In other words I asked for the offering memorandum. He e-mailed back saying he would be glad to talk to me. Note: No

offering memorandum was sent. I called.

During our conversation I confirmed what I had heard from another source, namely that the only things being sold were the name, “Tucson Citizen,” the archives, the subscriber list and the names of the carriers. The JOA was not for sale. Okay.

Being an online sort of guy I thought why not put a group together and publish an entirely digitized version, so I asked what might be considered a non-frivolous offer. I was told that it would probably take pretty deep pockets in addition to a substantial buying price because, get this: It would be a condition of the sale that the buyer would have to publish a dead tree (a paper) newspaper.

And of course since the JOA was not for sale that would mean finding a new printing plant.In other words the sale was being structured so that no one would buy the Citizen and Gannett could close it down but retain the income flow from the JOA with the Star.

When I expressed my dubiousness about the deal Mr. Broadwater indicated that it had been vetted by the DOJ.

I’m not the only person to make enquiries. An attorney friend, whose practice includes advising clients on investment opportunities, called.My friend was told that before any offering memorandum could be sent a full financial disclosure would have to be made by any potential buyer. That put paid (at least for now) to any further interest on my friend’s part.

I pretty much bagged stirring up the pot until yesterday, when I received a call from Justin Dempsey of the DOJ. He had heard, I don’t know how, that I had spoken with Broadwater and wanted to know the details of my conversation so far as I could remember them. I told him.

He seemed quite surprised when I said I thought the DOJ had already vetted and approved the deal.

More to come.

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