UPDATE: After Trib Meeting, FitzSimons Says Anything's Possible

By: The Associated Press and E&P Staff Tribune Co. announced Thursday night that it is restructuring two complex partnerships with the Chandler family, its largest single shareholder, that needed to be revised in order for the struggling media company to pursue new initiatives.

Following a much-anticipated meeting of its board of directors, the newspaper and TV station owner also said the board named an independent special committee to oversee strategic actions that management expects to take by the end of this year.

The New York Times reports on Friday, "The Tribune Company said last night that it would consider selling any or all of its 11 newspapers and 25 television stations, a move that could reshape the media landscape." The properties include The Los Angeles Times, The Chicago Tribune, the Hartford Court, Oralndo Sentinel and Baltimore's The Sun.

In a telephone interview, Dennis FitzSimons, the Tribune's chairman and CEO, told the Times that the board?s actions ?eliminated impediments to any transactions we might want to do, and management will explore strategic alternatives.??

The Chicago Tribune reports that after the meeting, FitzSimon said, "Everything's on the table." But he also suggested that the Los Angeles Times, currently in turmoil over cuts, was not a likely candidate for sale. The board did not consider the current struggles there, and FitzSimons told the Tribune that Editor Dean Baquet had done a good job in Los Angeles overall.

FitzSimons and other sources said possibilities include taking the company private in a leveraged buyout, spinning off the company's televisions stations and selling some newspapers.

The partnerships with the Chandlers, the former owner of Tribune's Los Angeles Times, had been widely expected to be dissolved following negotiations between the company and the Chandler Trusts.

Instead, the Chandlers will retain 95 percent interest in the partnerships and will increase their holdings of Tribune common stock to approximately 48.7 million shares from approximately 36.9 million, Tribune said in an evening statement.

The partnerships contain some $3.5 billion in assets and have hampered Tribune's ability to make transactions because of major tax consequences.

"Today's actions, along with our performance improvement plan, are consistent with our overall objective to generate the most value for all Tribune shareholders," said FitzSimons.

The Los Angeles Times reports on Friday: "Outside experts were divided on whether Thursday's action would inevitably lead to something as dramatic as a breakup or a sale of The Times."

Paul Ginocchio, analyst for Deutsche Bank, said realignment of the partnerships cleared a path for big changes. Ginocchio told the paper: "Why wouldn't you get rid of the L.A. Times, your squeakiest wheel? Or most of the TV assets could be spun off or sold. Then Tribune is in a position to go private, if that is what they want to do."

But analyst John Morton noted that the seven board members on the special committee have supported management, which has been reluctant to sell The Times.
"I find it unlikely they would want to dispose of the Los Angeles Times, which is a major revenue and profit producer for them," Morton told that paper Thursday night. "It would seem irrational. On the other hand, there are other forces at work, namely the Chandler family."

Under the terms of the restructuring, Tribune will receive distributions of all of the Tribune preferred stock - which currently is owned by the partnerships - and approximately 39.5 million shares of the 51.3 million Tribune common stock held by the partnerships.

Tribune also will receive the right to acquire the real estate owned by the partnerships in January 2008 for $175 million. The partnerships currently own real estate used by the Los Angeles Times, Newsday, Baltimore Sun and Hartford Courant newspapers, and various other investments.

The two partnerships were created in 1997 and 1999 by the Chandler Trusts and Times Mirror Co., which Tribune bought from the Chandlers in 2000. They enabled the Chandlers to diversify their Times Mirror holdings through a tax-free swap of family stock for company assets, but only preserved the tax benefits if they stayed intact for seven years - a period which expired this month.