A billion for your thoughts
Why billionaire Ron Burkle's interests should
Undated photo courtesy
Kirshenbaum and Kepa
Askenasy, Fog City Journal I-Team
December 1, 2006
A billionaire's biggest problem is that a billion dollars aren't
enough. In a natural quest for ever-greater sums of money, Billionaire
Ron Burkle intends to bankroll Treasure Island development - and
maybe gain some hefty media control, too.
+ + +
Billionaire Ron Burkle once bagged groceries for his father's
chain of supermarkets. Now he can expect more than just riches
and celebrity friends. He stands to gather yet more riches with
the aptly named Treasure Island. Perhaps more ominously, he could
also start gaining some control over the media industry should
he win the battle for the Tribune companies.
To San Franciscans, his business interests are worth following.
In what has been called a "sweetheart
deal," Burkle is set to be the premier profit-maker at
Treasure Island by financing its development. This would likely
be on account of his astonishing resources, and, more strategically,
the connections of his former employee, Darius
Anderson. (Anderson has appeared previously in a Fog
City I-Team story on Treasure Island.)
Anderson is a very high-stakes player in some of the most lucrative
Bay Area land deals. It must have seemed logical to shut out other
interested parties and bring Burkle, and his sizable fortune,
into the exclusive partnership called Treasure Island Community
Calls to Platinum Advisors, Anderson's firm, were not returned.
It would have been worth asking why anyone, particularly a billionaire,
would tempt negative attention by entering into the kind
of deal that requires assistance
from local politicians.
Like many ultra-wealthy individuals, Burkle doesn't keep a particularly
high profile. But attention
comes with all that money; some of it is the kind few people
+ + +
Ron Burkle lives in Los Angeles and engages in the sort of activity
that's reported mostly in business pages. His investment firm,
Companies, is known mainly for masterful acquisitions and
mergers of grocery and retail chains: Pathmark, Fred Meyer, Kroger,
and the like.
Burkle's La Jolla pleasure dome
Photo by John
Since former military bases present such rare and golden development
opportunities, a land use deal like Treasure Island might have
been hard to pass up, even for an individual normally associated
with grocery stores. But what of Burkle's more recent moves into
the media business? How did Burkle's current
bids for ownership of the Tribune Co., a giant media conglomerate
comprised of 25 TV stations, several important newspapers, and
a baseball team, come about?
Burkle's spokesperson at the Yucaipa Companies, Frank Quintero,
was vague on all matters. He said he did "not know that we
could be described as a major investor" at Treasure Island.
(Burkle is a principle investor.)
And then Quintero dismissed questions on the move from grocery
stores to media chains: "It's not a new area of investment
for us. We have a very diversified portfolio that we've developed
over the past 20 years." But besides Burkle's being named
to the board of Yahoo! Inc. in 2001, there is no discernable trace
of his involvement in media businesses.
Linda Foley, President of the Newspaper
Guild based in Washington, D.C., acknowledged that Yucaipa
"had only dabbled before in a peripheral way" with media
companies. But she said that earlier this year, Burkle and Yucaipa
seemed to understand not just the profit in a potential separate
take-over of several Knight -Ridder newspapers, but the needs
of the workforce as well. (Yucaipa did not wind up with the Knight-Ridder
And, regardless of Yucaipa's lack of experience in any press
room, Josh Silver, Executive Director of the non-profit Free Press,[www.freepress.net]
noted that Burkle could be considered a much better owner than
a huge, profits-only media corporation like Gannett or Clear Channel.
Being a Los Angeles local, Burkle might have more of an interest
in competent local news coverage by the Los Angeles Times, one
of the dozens of "properties" belonging to the Tribune
Or not: Silver added that ownership of a newspaper or media outlet
gives one an enormous amount of political influence. "The
owner will set the tone for the paper," he said. "Look
at Rupert Murdoch at the New York Post."
+ + +
Burkle is familiar with politics, beyond the influence-wielding
that led to the Treasure Island booty. He is often referred to
as a friend of Bill Clinton, and has been known to throw a big-ticket
political fundraiser or make sizable political donations.
News reports suggest that not all of Burkle's political motives
are altruistic. His venture capital funds were filled with $700
million of cash from CalPERS,
the California state employee pension funds. This was after Burkle
made campaign donations to Willie Brown, Phil Angelides, and over
a million dollars to the campaign of then-Governor Gray Davis.
Once Schwarzenegger looked like the next governor of California,
$121,000 to his campaign.
Other billionaires have found themselves in the similar position
of operating easily in financial and political circles, to the
benefit of both. And often they come to the same conclusion: the
missing ingredient of power is the media.
Silvio Berlusconi, until recently Italy's prime minister, took
this lesson to extremes. A billionaire with vast holdings and
limitless arrogance, he methodically set about gaining financial
control of so much of Italy's press that he eventually owned
most of Italy's viewership outlets. And that influence, critics
say, led to political influence that retroactively changed laws,
keeping him out of legal trouble and prison.
This isn't terribly unusual these days. Very recently, Billionaire
Maurice Greenberg decided to make
a play for the New York Times Co. itself. It would seem that
fury over the way he was covered in the Times led to this interest
+ + +
And what could have led to Ron Burkle's journalistic interest?
In April, there was a nasty extortion case that got splashed in
the papers; a gossip columnist tried to shake down Burkle in exchange
unplesant items about him out of the New York Post.
And over the past few years, there has been a lot of back-and-forth
in Burkle's messy
divorce. Gossip columnists might love to get hold of a billionaire's
legal divorce proceedings; that's always been a traditional agony
with a high-profile divorce. But no - in 2004, Governor Schwarzenegger
signed new legislation sealing the divorce
Mr. Burkle's spokesperson declined to answer further questions,
but it would appear that there is ample motivation for Burkle
to delve more firmly into the media industry. And a new delay
in the auction process for the ever-more-desirable Tribune Co.,
reveals he may have lined
up the Carlyle Group, one of the heaviest hitters of them
all, to join
his Dream Team in acquiring it.
The Tribune Co., and readers of the Chicago Tribune, the Los
Angeles Times, the Baltimore Sun, and so many others, may be consumers
of Burkle's news and media vision whether they care to be or not.
The Carlyle Group, affectionately known as an investment club
for former U.S. presidents, doesn't play around. Based in Washington,
they are experts at profiting from the intersection of military,
industrial, and political winds.
And to think San Franciscans were focused only on whether there
would be affordable housing units built on Treasure Island, lulled
into complacency by the plans for organic gardens to be set amidst
the 40-story condo towers.
Political Players: Treasure Island
(click on the image below to see a larger
version of the chart)
trees, views, art deco buildings
Virtual tour of Treasure
happens in Ron Burkle's life is serious business news
Editor's Note: Views expressed by columnists
published on FogCityJournal.com are not necessarily the views or beliefs of
Fog City Journal. Fog City Journal supports free speech in all its varied forms
and provides a forum for a complete spectrum of viewpoints.