Tribune Deal Now A Lock -- As FCC Grants License Waivers Friday

By: E&P Staff After months of nail-biting, Tribune Co. Friday evening got the last regulatory OK it needed to go private.

The Federal Communications Commission (FCC) granted temporary waivers of enforcement of its cross-ownership rules in the markets where it gained a newspaper or broadcast station as a result of is 2000 acquisition of Times Mirror Co. Those waivers would have lapsed when Tribune changed ownership from a public company to a private company with an employee stock ownership plan in the deal engineered by Chicago real estate mogul Sam Zell.

And in a somewhat surprising move, the FCC granted a permanent waiver of its rule against same-market common ownership of newspaper and broadcast in Chicago, allowing Tribune to operate its flagship Chicago Tribune, the superstation WGN-TV, and its historic WGN-AM radio station. Those stations, the FCC noted, were established long before the cross-ownership law was passed in 1975.

The 3-2 FCC vote was on party lines, with Democrats Michael J. Copps and Jonathon Adelstein dissenting.

The FCC action gives Tribune two-year cross-ownership waivers in four markets: New York, Los Angeles, Miami, and Hartford, Conn.

Tribune needed the waivers to complete the going-private transaction by the end of the year. If broadcast licenses could not transfer to new ownership by that time, Tribune would have faced far higher taxes, and the possibility of more expensive financing.

Tribune had been looking for indefinite waivers in those markets, anticipating that the cross-ownership rule will be eliminated. FCC Chairman Kevin Martin has set a Dec. 18 vote on a limited rollback of cross-ownership that permits newspaper/broadcast combinations in only the 20 largest U.S. markets.

Under the proposal, Tribune would have to sell either its TV station or the Hartford Courant.

"We appreciate today's action by the FCC, which allows our transaction to move forward," Tribune Chairman, President and CEO Dennis FitzSimons said in a statement. "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."

In a statement, Democratic Commissioner Copps called the permanent Chicago waiver "a brazen reversal of thirty years of settled precedent" to encourage a diversity of ownership and voices in media markets.