Tribune Co. is tossing newspapers to the side to focus on TV broadcasting, announcing plans to spin off its newspaper-publishing businesses — including its namesake Chicago Tribune and the L.A. Times — into a separate company.
The company said the split would let each line of business play to its strengths. Last week Tribune announced $2.7 billion deal to acquire Local TV Holdings’s 19 stations, nearly doubling its television broadcast footprint.
The move to separate its TV assets from publishing comes amid increasing speculation that Tribune’s long-term plans, following the bankruptcy reorg completed in January, include an IPO to help principal owners Oaktree Capital and JPMorgan Chase cash out.
Rupert Murdoch’s News Corp. recently completed a similar separation, with the new News Corp. encompassing news publishing operations and 21st Century Fox comprising the TV and studio businesses.
For Tribune, the two resulting companies following the separation, which expected to take up to a year to complete, would be:
- Tribune Publishing Co., which would include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press.
- Tribune Co., which would comprise the company’s other principal businesses, including 42 local television stations in 33 markets (following the close of Tribune’s acquisition of Local TV); WGN Radio; superstation WGN America; Tribune Studios; Tribune Digital Ventures; Tribune Media Services; its equity interests in Classified Ventures, CareerBuilder, and The TV Food Network; and its portfolio of real estate assets.
Each company would have annual revenue of more than $1 billion and “significant operating cash flow,” Tribune prexy and CEO Peter Liguori said in announcing the plan.
Liguori, previously chief operating officer of Discovery Communications and head of entertainment at Fox Broadcasting, joined Tribune in January 2013 with a strategy of bulking up the company’s TV portfolio.
“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,” Liguori said in a statement.
Tribune Co. said its board decided on the newspaper spinoff after months-long review of multiple strategic alternatives.
Company said it will develop detailed separation plans over the next nine to twelve months. After the spin, each company would have its own board of directors and senior management team.
The separation plan is subject to conditions, including regulatory approvals, review by tax attorneys, further due diligence and the effectiveness of appropriate filings with the Securities and Exchange Commission. According to Tribune, the proposed separation will involve the tax-free distribution of shares in Tribune Publishing Co. to existing stockholders.