The end of Tribune Co.’s four-year slog through Chapter 11 restructuring is good news for showbiz. A healthier Tribune will have a greater ability to spend on programming for the TV station group and WGN America cabler that are clearly the prime focus for the new owners and soon-to-be-named CEO Peter Liguori.
Even before the long-awaited bankruptcy settlement was confirmed on Monday, Tribune’s broadcasting wing has been stepping up its activity in the original programming arena. With stations in Gotham, L.A., Chicago and other top markets and a basic cabler reaching more than 70 million households, the group can easily leverage its distribution heft to launch programs.
CBS TV Distribution is expected to announce next week a deal with Tribune stations for a daytime syndie strip dubbed “The Test” from producer Jay McGraw’s Stage 29 shingle. Skein, hosted by comedian Kirk Fox, will revolve around DNA and lie detector tests to settle personal disputes.
Tribune is said to have an equity stake in the program, as its interest in “Test” allowed CBS and McGraw to pull the project together quickly for a fall launch. Tribune was also the catalyst behind the return of Arsenio Hall to the latenight arena this fall. The station group’s search for an original talk-variety show in the hour that follows its late newscasts led its execs to court Hall, whose strip will also be distribbed by CBS TV Distribution (Daily Variety, Aug. 10).
The selection of Liguori, a former top exec at Fox, FX and Discovery Communications, as the new CEO is an unmistakable sign that the company intends to build up its TV assets. As the bankruptcy proceedings wore on, there was much speculation that Tribune’s assets would ultimately be carved up for auction by the investment firms that are its creditors-turned-owners — led by Oaktree Capital (which controls 23% of Tribune), Angelo Gordon and Co. (9%) and JPMorgan Chase (8%).
But the massive restructuring has left Tribune’s balance sheet in good shape, with more than $2 billion in cash on hand, modest debt of $1.1 billion (compared to the $13 billion load that forced it into Chapter 11) and TV assets with upside. It also closed a $300 million term loan to fund ongoing operations.
Sources familiar with the situation say that while the companies now controlling Tribune are investment firms and not operating entities per se, the focus is on still on growing the TV side, possibly through acquisitions.
One big looming question for Tribune’s new regime is the fate of its affiliation deals with the CW network for 13 of its stations, including its prime real estate in Gotham, L.A. and Chicago. Tribune outlets inked a 10-year affiliation pact with CW in 2006 when the network was formed by Warner Bros. and CBS through the merger of the WB Network (which had Tribune as its core affil group) and UPN. In a world of ever-expanding programming options and platforms, Tribune is likely to find many more opportunities for its Monday-Friday primetime shelf space than it had in 2006.
On the publishing side of Tribune, sources say there will be no rush to sell off its newspaper assets, which include such marquee dailies as the Los Angeles Times and Chicago Tribune. One source noted that even with the depressed advertising market of the past few years, most of Tribune’s largest papers are cash-flow positive and thus not a big drain on overall earnings.
Reps for Tribune would not comment on future plans Monday. Kenneth Liang, managing director and head of Oaktree Capital’s distressed debt group, underscored the company’s strong post-bankruptcy financials to the Los Angeles Times on Tuesday. “We’re not going to be forced into a decision because of financial constraint,” he said.
Liang and Liguori were among the seven board members unveiled Monday for the new-model Tribune. Like Liguori, most of the new members have deep experience in showbiz, although not in publishing: Oaktree prexy Bruce Karsh, current Tribune CEO and L.A. Times publisher Eddy Hartenstein, former Disney exec Peter Murphy, Hanson Jacobson founding partner Craig Jacobson and former Yahoo exec Ross Levinsohn.
Liguori’s appointment as CEO is expected to be made official within the next few weeks. There had been speculation that Murphy would be appointed to a chief operating officer role alongside Liguori, but that is not imminent, sources said.