Tribune Co. to Spin Off Newspaper Unit
Tribune Co. said Wednesday that it plans to separate its broadcasting and newspaper businesses in a move similar to the recent split of Rupert Murdoch's empire into a publishing company and an entertainment giant and Time Warner's planned spinoff of its Time Inc. magazine unit.
The spinoff of the publishing operations, which include the L.A. Times and Chicago Tribune, will create two companies with revenue of more than $1 billion, "each with greater financial and operational focus, the ability to tailor its capital structure to its specific business needs and a management team dedicated to seizing strategic growth opportunities with maximum flexibility," said the company, which had also explored a possible sale of its newspapers.
Tribune, in an indirect reference to its attempts to sell its papers on Wednesday, said that it had explored strategic options but didn't immediately address why it decided against a sale. Some observers previously cited price and tax issues as hurdles. But the planned spinoff doesn't mean that Tribune couldn't agree to a sale of some or all of its newspapers before or after the separation, which could better highlight the financials and performance of the print assets.
"The proposed separation is designed to maximize shareholder value through the spinoff of Tribune’s publishing assets to an independent company and the tax-free distribution of shares in that company to the stockholders of Tribune," it added.
The proposed transaction is the latest step in the transformation of the media company, led by president and CEO Peter Liguori. Last week, Tribune announced an agreement to acquire Local TV Holdings and its 19 TV stations in 16 markets across the U.S.
After the spinoff, Tribune Co. will consist of 42 local TV stations in 33 markets, WGN Radio, WGN America, Tribune Studios, Tribune Digital Ventures, Tribune Media Services and the company's stakes in Classified Ventures, CareerBuilder and the Food Network.
The new Tribune Publishing Company would house all publishing assets, including the L.A. Times, Chicago Tribune, The Baltimore Sun, the Sun Sentinel in South Florida, Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press.
“Moving to separate our publishing and broadcasting assets into two distinct companies will bring single-minded attention to the journalistic standards, advertising partnerships and digital prospects of our iconic newspapers, while also enabling us to take advantage of the operational and strategic opportunities created by the significant scale we are building in broadcasting,” said Liguori. “In addition, the separation is designed to allow each company to maximize its flexibility and competitiveness in a rapidly changing media environment.”
The company didn't give a detailed timetable for the separation on Wednesday but said that over the next nine to 12 months, its management team would develop detailed separation plans for the company's board to consider. "There can be no guarantee that the transaction will be concluded or assurances as to transaction terms," it added.