Trials and Stribulations

Staffs gutted. Secrets stolen. A traitorous publisher forced to defend his actions in court. The future has never looked bleaker for the Star Tribune and the Pioneer Press.

Nowadays, some staff members worry whether they'll have the resources to cover the bare necessities. "In my own area, politics, we have a looming presidential election, the Republican convention, congressional races," says D.J. Tice, the former Pioneer Press columnist who is now the Star Tribune's politics and government team leader. "I just don't like thinking about it, thinking about how we're going to cover it. Who's going to do the cop checks? Who's going to the city council or the school board? Who's going to keep an eye on those things?"

Other Strib veterans express dismay that the paper is myopically focusing on suburban issues at the expense of national and international affairs. "We've lost our guts to tell people what matters," says Grow, the longtime metro columnist who still feels like a part of the paper even after taking the buyout. He points to a recent edition of the Strib where restrictions on water sprinkers in Eden Prairie were on the front page, while news of crucial Supreme Court decisions—"ones with huge impact here"—was relegated to A6.

"I'm not saying there isn't a place for the sprinkling ban, because there is," Grow says. "But we do a disservice if we think people only care about how brown their yards are and don't give a shit about anything else."

 

In the fall of 2006, Jay Weiner was excited about his job at the Star Tribune. The veteran sports reporter was coordinating a chain-wide plan for all McClatchy daily papers to cover the 2008 Olympics and had been drafted to head up Buzz.mn, an ambitious blog that was still trying to find its footing. Editor Anders Gyllenhaal, still weeks from taking off to the Miami Herald, was actively seeking input on various features and special projects to go on the internet. There was a sense that McClatchy appeared keen on investing in its flagship paper. "The newsroom was functioning, and we were spending money," Weiner recalls.

Weiner was at an airport in Puerto Rico at the end of December when he received an email informing him that the paper had been sold. "I read about it, and it's a cliché, but the rug had been pulled out," Weiner says. "It's been a freefall ever since."

The new owner of the Star Tribune, he learned, was Avista Capital Partners. Like most Star Tribune employees, Weiner had never heard of the private equity firm. Once the shock over the sudden sale had dissipated, the question on everyone's lips was: Who is Avista Capital Partners?

The ensuing months provided precious little substantive information about the investment group. Avista was formed in 2005 by a group of professional investors, most of whom had previously worked for DLJ Merchant Banking Partners. They raised an initial $2 billion from 60 investors and opened offices in New York and Houston.

Up until the purchase of the Strib, the group's holdings were mainly in health care and energy. And they spent money in those areas. In May 2006, Avista pumped $50 million into Celtique Energie Limited, a company that performs oil and natural gas exploration in Europe and Africa. In February 2007, Avista purchased BioReliance Corporation, a pharmaceutical services company, for $210 million.

The purchase of the Star Tribune wasn't the first time Avista had tried to buy into the newspaper industry. In 2006, the company made a failed bid for Philadelphia's two struggling daily newspapers, the Daily News and the Inquirer, both of which had been owned by Knight Ridder.

But since the news of the Strib purchase broke, speculation has been rampant that Avista's chief interest in the newspaper is the prime downtown parcels of land it owns. Ever since November, the Minnesota Vikings team has looked at land in the Downtown East neighborhood as part of its plans for a new stadium.

Almost immediately after the Strib sale, Vikings owner Zygi Wilf was meeting with people from Avista to discuss the possibility of buying the land. To that end, the Vikings announced in June that the team had purchased four parcels from the Star Tribune for $45 million—more than double the value ascribed by a Hennepin County tax assessment.

Looking through stadium plans that have not been made public but were shown to City Pages, it's clear that there's one missing parcel in Wilf's sweeping vision: the lot that holds the Star Tribune's offices. And the Vikings organization has made no secret that it covets the land.

"We certainly made it clear that we're interested," says Vikings VP of public affairs Lester Bagley. "Given what's going on at that newspaper, I'm not sure [Avista] wanted to displace all of their people."

But with Avista's 2007 revenue off by 20 percent of projections, according to a recent Wall Street Journal report, selling the Strib land could be a quick way to get back in the black. The building is in need of renovation, and Weiner points out that Avista might find it cost-effective to open "satellite offices" around the metro. "Why not have your Bloomington guy in Bloomington?" he asks.

Chris Harte, a consultant for Avista who serves as chairman of the Star Tribune, denies that the company has any plans to close the newspaper's downtown office.

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