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SOLD!


The changing face of The Oklahoman

Clifton Adcock September 28th, 2011

A simple headline appeared the morning of Sept. 15 on the NewsOK website. The four words confirmed what some in the journalism world had been whispering about since June: “OPUBCO to be sold.”

Oklahoma Publishing Co., which owns The Oklahoman newspaper, NewsOK and a variety of other assets, announced it was being purchased by the Anschutz Corporation, owned by Colorado-based billionaire Philip Anschutz.

All stock of the privately owned OPUBCO is to be sold to Anschutz in early October, Christy Gaylord Everest, chairwoman and CEO of OPUBCO, said in the announcement.

The Oklahoman has been owned by the Gaylord family for more than 100 years, longer than Oklahoma has been a state, and has been an editorially conservative publication for almost all of its history. Everest said The Oklahoman’s conservative beliefs and values mirror those of Anschutz, an owner of several other publications.

Although the selling of one of the state’s two family-owned daily metropolitan papers marks the end of an era, it’s also the beginning of one. Once the purchase of OPUBCO is finalized, it will be the first newspaper owned by Anschutz that is the dominant daily in its market.

However, some say the driving force behind his reasons might not have been its flagship product — the newspaper — but rather some diversified assets.

‘Jewel-encrusted swizzle stick’
Two weeks prior to the OPUBCO announcement, Denver reporter John Rebchook heard an interesting rumor: Something big was about to happen with one of the most extravagant hotels in the Rockies, sources told him.

The rumor was The Broadmoor hotel, a five-star luxury resort in Colorado Springs owned by OPUBCO, was about to be sold to Anschutz, said Rebchook, a 30-year journalism veteran and former real estate editor for the Rocky Mountain News.

right Philip Anschutz is partial owner of the Los Angeles Lakers.

Rebchook, who reports for the website Inside Real Estate News, called OPUBCO to confirm the story, but was referred to Steve Bartolin, the CEO and president of The Broadmoor.

Bartolin, who told Oklahoma Gazette that he also sits on the OPUBCO board, told Rebchook the rumor was just that — a rumor — and that there were no plans to sell The Broadmoor. Lacking evidence that the sale was going down, Rebchook said he did not publish a story.

Then the confirming announcement came. Rebchook asked Bartolin why he had told him the sale wasn’t happening, and Bartolin said he was unaware a week before the sale, Rebchook wrote. 

According to the OPUBCO announcement, board members were approached in early June.

Rebchook quoted Bartolin as saying the offer by Anschutz in June “was more of a Gaylord family thing.”

Like many media companies affected by the economic downturn, the paper implemented changes. Between 2008 and 2011, OPUBCO went from about 1,100 employees to 690.

Two leadership positions hired in 2003 by Edward L. Gaylord recently departed. Ed Kelley, who has been the paper’s editor since 2003 and worked at the publication for more than 35 years, announced June 10 he would become editor at The Washington Times. Kelly Dyer Fry became editor of The Oklahoman and will serve as vice president of news for OPUBCO.  

About 10 days after the Kelley announcement, Oklahoman publisher David Thompson announced he would retire Sept. 1. OPUBCO executive vice president Christopher Reen is replacing him. In late June, Thompson said the timing was “purely coincidental.”

right, The Broadmoor hotel, in Colorado

Everest said in a Sept. 15 announcement about the sale that Anschutz approached OPUBCO with a “unique offer” in early June.

Rebchook also wrote that Anschutz previously expressed interest in purchasing the hotel, only to be rebuffed, and it’s likely he found another way to go after it by purchasing the whole company, rather than just the property, which was likely the “jewel-encrusted swizzle stick that stirred Anschutz’s interest in the entire company.”

The diverse holdings of Anschutz resemble those held by OPUBCO, and the daily may not have been the primary interest, said Peter Gade, a Gaylord Family Endowed Professor in the Gaylord College of Journalism and Mass Communication at the University of Oklahoma.

“Some of the things I’ve read in The Oklahoman, if you look at the holdings of these companies, I don’t think media were the driving force in this purchase,” Gade said. “You look at the holdings of Anschutz and the holdings of OPUBCO, and they’re pretty complementary: They’re in entertainment, they’re in real estate, they’re in media. You couldn’t almost take two different companies of such diverse holdings and put them together. They really fit that closely. For Anschutz, I think some of the interest has to do much more in the entertainment and real estate.”

Since both Anschutz Corporation and OPUBCO are both privately held companies, the exact details of the deal may never be made public.

“It’s always tricky when you’ve got two privately held companies dealing with each other, what the value is,” said Rebchook. “I think you could reasonably say it’s worth somewhere between $700 million to a billion or more.”

About Anschutz
Anschutz is notoriously media-shy, and the Anschutz Corporation declined to comment for this story. Likewise, OPUBCO executives did not respond to requests for comment.

However, almost all previous reports on Anschutz make it clear that the Denver billionaire, ranked by Forbes as the 39th richest person in the United States and one of the wealthiest people on the planet, is an extraordinarily savvy businessman with a knack for getting things done both in business and politics.

After his purchase of a struggling movie theater chain, Anschutz turned Regal Entertainment Group into one of the largest U.S. theater companies, Rebchook said.

“That was a pretty brilliant move on his part. People were declaring movie theaters dead when home theaters and DVDs were coming out,” Rebchook said. “He made a ton of money.”

right, Anschutz, pictured with Henry Winkler

A Russell, Kan., native and graduate of the University of Kansas, Anschutz started out in ranching and oil and gas exploration, before investing in railroads, media, entertainment and telecommunications companies.

Some of the publications owned by Anschutz include the online hyperlocal sites of the Examiner.com in several markets — including Oklahoma City — as well as The Weekly Standard, The Washington Examiner and The San Francisco Examiner. The Christian conservative also owns Walden Media, the children’s film production and publishing company known for “The Chronicles of Narnia,” “Holes,” “Ray” and “Waiting for Superman.”

Bartolin said Anschutz is a regular visitor to The Broadmoor. While OPUBCO’s ownership and excellent management brought forth a renaissance in the hotel’s history — marked by expansion and investment — the diverse holdings of both parties make the deal a perfect fit.

“I think we’re fortunate going forward to have a quality owner like Mr. Anschutz. He’s a good guy, number one,” Bartolin said. “Number two, he has the resources and the passion that are important for a property like this.”

In terms of ideology, one profile on Examiner.com posits Anschutz as a possible “conservative counterpoint to (liberal billionaire) George Soros,” and the public records of the Anschutz Foundation show that, in addition to hundreds of millions of dollars in donations to charity, Anschutz gives heavily to conservative causes.

But along with some high-profile successes, there have also been some high-profile scandals.

The Anschutz-founded Qwest, a telecommunications company, was severely battered in the early to mid- 2000s after allegations of insider trading and questionable accounting practices resulted in indictments of some of the company’s top executives, billions of dollars in shareholder losses and layoffs at the company, according to a 2006 Los Angeles Times profile of the intensely private industrialist.

In 2005, Qwest paid a $250 million settlement to the Securities and Exchange Commission on allegations of having about $2.5 billion in phony revenue on its books, according to the Los Angeles Times, and agreed to pay $400 million for resolution of a shareholders lawsuit. Prosecutors did not suggest that Anschutz was involved in any wrongdoing, according to Forbes.com, despite selling $1.5 billion in shares.

However, he was forced to settle a 2003 lawsuit by then-New York Attorney General Eliot Spitzer alleging that Anschutz had improperly received Initial Public Offering stock from Salomon Smith Barney in exchange for steering investment banking business to the company, according to the Times report. The suit was settled for $4.4 million.

A brave new world
Anschutz, who acquired the conservative Weekly Standard in 2009 from media mogul Rupert Murdoch, owns Examiner newspapers in several cities.

The purchase of The Oklahoman is Anschutz’s first foray into owning a dominant metro daily, Gade said.

“In Washington and San Francisco where they have the Examiners, those papers exist as kind of the secondary papers in already well-established newspaper towns,” Gade said. “The difference in this purchase is now that Anschutz’s paper will be the primary paper. It would be surprising to me if he gutted it.”

Jack Willis, adjunct professor at Oklahoma State University, said he hates to see the local paper sell.

It’s not likely that news consumers and advertisers would see immediate, sweeping changes in content, since most of the current structure will remain the same, said Terry M. Clark, director of the Oklahoma Journalism Hall of Fame and professor of journalism at the University of Central Oklahoma.

“I don’t think most people will see much of a difference in the paper, at least in the short term, because basically you’re going to have the same staff,” Clark said. “What it will mean in the long term is anybody’s guess.

“Historically, it’s a milestone, because it’s the end of a family newspaper, one that’s been very, very active in state culture and politics. How that will change, who knows?”

DETAILS OF THE DEAL
In 2003, when Edward L. Gaylord died, The Associated Press pegged the value of both OPUBCO and Gaylord Entertainment at $2.5 billion.

Gaylord Entertainment, which owns several hotels and entertainment venues, split from OPUBCO and became a publicly traded company in 1991, and was not part of the Anschutz Corperation- OPUBCO deal.

Because both companies are privately owned, they are not required to disclose how much the new deal was worth. However, Denver real estate reporter John Rebchook said that he was able to get some rough estimates on some of the OPUBCO properties after speaking with several industry experts. Here are a few of the estimated numbers: —The Broadmoor hotel: around $400 million —Hyatt Regency Lost Pine Resort & Spa: $175 million —Pavestone LLC, a Dallas-based concrete manufacturer: $200 million —Greenland Ranch water rights, Douglas County, Colo.: $29 million Besides the aforementioned properties and the newspaper, the deal also includes OPUBCOowned assets such as NewsOK, The Manitou & Pike’s Peak Railway in Colorado, real estate in Texas, De Wafelbakkers frozen breakfast food company, an aviation company in Oklahoma City, a Western art collection and Suddenlink Communications. —Clifton Adcock

 
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