FCC approves Zell's purchase of Tribune
EmptyWASHINGTON -- Federal regulators have agreed to allow real estate mogul Sam Zell to take over Tribune, waiving a key rule that will allow the company to continue to own TV stations and newspaper properties in the same cities.
Zell is trying to buy the Chicago company with a group of private-equity investors for about $8.2 billion. Tribune owns the Chicago Tribune, the Los Angeles Times, Long Island's Newsday and several TV stations.
Tribune asked for permanent waivers to the rule, but FCC chairman Kevin Martin said he wasn't willing to go along with that. The need for a permanent waiver would be obviated in all but the Hartford, Conn., market under Martin's proposal to generally ease the cross-ownership ban. The commission is expected to vote on the rule change Dec. 18.
Under the FCC's Friday order, the company's waiver will run out in two years, or six months after litigation over the cross-ownership issue ends. The commission permanently grandfathered the company's ability to own the Chicago Tribune, WGN-AM, and WGN-TV in Chicago, saying that those have been in effect so long, and the market in Chicago is so diverse, that there was no need to make them sell.
Martin likely can depend on the votes of Republican commissioners Robert McDowell and Deborah Tate, who have indicated that they support loosening the cross-ownership ban, but it was unclear if that translated to the Tribune deal.
Democratic commissioners Michael Copps and Jonathan Adelstein generally oppose action that makes it easier for media companies to consolidate.
Both Copps and Adelstein voted against the deal Friday.
"If this order were a newspaper, the banner headline would read 'FCC Majority Uses Legal Subterfuge to Push for Total Elimination of Cross-Ownership Ban,' " Copps wrote.
Adelstein called the commission decision a "ploy."
"A simple two-year waiver would have accomplished the goals of the majority and the applicants," he said. "But instead, the order employs certain novel, ill-advised and back-breaking legal gymnastics that will surely leave observers with their heads spinning."
The three Republicans, Martin and McDowell and Tate, found the merger in the public interest.
"Approving this transaction allows the new owners to breathe new life into Tribune's newspapers and broadcast properties," McDowell said. "Tribune's readers, viewers and listeners will benefit from its strengthened and more efficient newsgathering operations."
Tate said the decision was good news.
"This is a good day for the 20,000 employees whose jobs depend on the outcome of this transaction and for the Chicago Tribune newspaper, a Chicago landmark since 1924," she said.
Tribune chairman, president and CEO Dennis FitzSimons said the decision would help secure the company's future.
"We appreciate today's action by the FCC, which allows our transaction to move forward," he said. "We look forward to implementing the new ownership structure that will enable us to focus all of our energy and resources on Tribune's future."