By: E&P Staff
So what will the Tribune Company sale to Sam Zell mean to the Los Angeles Times? It’s a little too early to tell but in its initial news story today on the deal, the Times included the following:
“The transaction would mark a watershed for both Chicago and Los Angeles. It would turn the 160-year-old Tribune and its flagship Chicago Tribune, a major economic and political powerhouse in the Midwest, over to a quirky businessman whose previous investments have not had nearly such a high public profile.
“And the deal would effectively liberate the Chandler family of California ? owners of the Los Angeles Times for more than a century ? from a newspaper business with which they have become disillusioned. For the second time in seven years, the Chandlers helped push The Times into the hands of new, Chicago-based owners.
“In 2000, the pioneering Los Angeles family sold its control of Times Mirror Co. to Tribune. And the Chandlers’ remaining 20% stake in Tribune still gave them enough leverage to demand the strategic review that that would end with this sale. The auction did not turn into anything like a bidding contest until Broad and Burkle submitted their revised offer, which they valued at $34 a share, or $8.1 billion, late last week.
“Zell, a maverick who fancies Ducati motorcyles, leather jackets and rousing games of paintball, had himself not entered the bidding until early February, after Tribune’s deadline for offers.”
Another article looked at the possible regulatory roadblocks and opened:
“Plans by the new owner of the Tribune Co. to keep the company intact present regulatory hurdles because of federal rules that prevent ownership of a television station and newspaper in the same market.
“The problem has loomed over Tribune since it purchased Times Mirror Co. in 2000, acquiring the Los Angeles Times and newspapers in two other markets where it already owned TV stations. But because federal licenses for those stations are only now expiring, the issue is coming to a head just as Tribune is being sold.
“The sale faces another regulatory challenge. The company’s ownership of the Chicago Tribune and television station WGN in Chicago had been grandfathered since the Federal Communications Commissions enacted the cross-ownership restrictions in 1975, but that protection doesn’t extend to new owners.
“For the sale to be completed, the FCC must approve the transfer of Tribune’s TV stations to any new owner, who must get waivers or sell some properties to comply with the rules. Real estate mogul Sam Zell, who won the bidding for the company, would consider selling the stations rather than the newspapers, according to a person familiar with his plan.”