By: E&P Staff The International Brotherhood of Teamsters on Tuesday asked the Federal Communications Commission (FCC) to reconsider its decision to grant Tribune Co. waivers from cross-ownership rule that the Chicago media giant needs to go private by the end of the year.
Teamsters represent about 2,000 employees across the company, and have been staunch opponents of Chicago real estate magnate Sam Zell's $8.2 billion deal to take Tribune private using an employee stock ownership plan (ESOP).
On a vote along party lines, the FCC decided 3-2 to grant Tribune temporary waivers of the cross-ownership rules to allow the television licenses in four markets where it also publishes a daily newspaper to be transferred to the new ownership. The Republican majority also granted a permanent cross-ownership waiver to the licenses for WGN-TV and WGN-AM in Chicago, where Tribune publishes its flagship Chicago Tribune.
Tribune lobbied furiously to get the waivers in time to complete the going-private deal by the end of this year. Without the waivers they would have faced increased taxes, plus the possibility of higher financing charges.
The Teamsters in its filing argues the buyout structure violates an FCC requirement that that stations be controlled by their owners -- "and not by Sam Zell, a trust established for the benefit of members of his family, and a pre-selected ESOP trustee."
That represents "third party" ownership, "and undermines the public interest and the FCC's mission of promoting localism and diversity."
As the deal is structured, ownership of Tribune will be transferred to an ESOP, which will be controlled by the board of directors and a trustee. The Teamsters maintain employees will have no significant say in management of the company.
"Apparently the FCC was tuned out during its public listening tour," Teamsters General President James P. Hoffa said in a statement. "In its rush to judgment, the commission has failed to enforce its current rules or protect the public interest."
Teamster Vice President George Tedeschi, an employee of Tribune's Newsday, said the Tribune deal represented an "unprecedented" separation of ownership and management that "would set a new, and very low, standard for compliance with the Communication Act's public interest requirements, which are the basis for the localism and diversity principles in broadcasting."
Tribune did not comment on the Teamsters' filing.
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