Tribune Media to Explore Sale of Company or Assets, Takes $385 Million Write-Down

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Courtesy of Tribune Media

Tribune Media, the large broadcasting company that was spun of from the old Tribune newspaper-publishing empire, said it would explore a sale of the company or some of its assets as part of an effort to boost shareholder value.

The company said it would consider everything from programming alliances to strategic partnerships as well as an outright sale of itself or some of its operations. Tribune also took a big write-down of $385 million for the full year 2015, citing the decline in value of its businesses. The charge and decision to put some or all of the company on the block could signal a curtailing of spending on original scripted series that cabler WGN America has mounted for the past two years.

Tribune shares shot up more than 9% at the start of trading Monday on the news of the decision to engage Moelis & Co. and Guggenheim Securities to consider strategic alternatives. The stock had dropped nearly 35% during the past six months.

“Tribune’s assets are valuable, powerful and performing well, as reflected in our full-year 2015 operating results,” said Peter Liguori, the company’s president and chief executive, in a statement. “However, it’s our belief that our current stock price does not reflect the full value of these assets. With the help of outside advisers, we have decided to initiate a process to explore every possible strategic and financial option with one clear goal: to unlock the value of our stock.”

The market for broadcast stations has heated up in recent years. Meredith Corp. and Nexstar Broadcasting recently dueled for the TV stations owned by Media General. In 2013, the company once known as Gannett bought up TV stations owned by Belo Corp., while Tribune put into place a $2.7 billion acquisition of Local TV Holdings. Many of the companies are focusing on broadcasting after jettisoning newspapers, the theory being that broadcast stations, which are thought to have strong ties to local markets, will generate revenues from distribution via cable and broadband in steadier fashion than their print counterparts.

Tribune Media said it had no definitive timetable to complete its strategic review, and would not comment on the process “until such time as any definitive agreements may be entered into in the process or as otherwise appropriate or required.”

The company will continue its efforts to gain financial reward from its real-estate holdings, which include the Tribune Tower located in Chicago and the north block of the Los Angeles Times Square property located in Los Angeles.

Tribune also said it had secured agreements with top executives that will have them continue their employment. Liguori signed entered into a new two-year employment agreement, while Chandler Bigelow was named executive vice president and chief financial officer. Tribune Media’s general counsel, Eddie Lazarus, was named chief strategy officer.

Tribune Media owns 42 TV stations across the country and is a key distributor of the CW broadcast network. In addition to WGN America it maintains a stake in Food Network, the cable network operated by Scripps Networks Interactive.

Tribune’s fourth-quarter and full-year earnings released Monday earnings showed the company recorded a net loss of $320 million for the year. The $385 million write-down includes $74 million related to losses from the underperformance of syndicated acquisitions “Person of Interest” and “Elementary” for WGN America. WGN America also just canceled original drama “Manhattan” after two seasons.

For the full year, Tribune revenue came in at $2.01 billion, up slightly from $1.94 billion in 2014.

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  1. Eric says:

    As for the idea of Tribune selling off former Local TV owned stations… I doubt Tribune would want to turn loose of all of them. The presidential election swing state stations (WJW, WITI, WTVR, WGHP, WNEP, WHO, WQAD, and WTKR-WGNT) would be too valuable… plus I doubt Tribune would want to break-up the Denver and St. Louis duopolies (KWGN-KDVR and KTVI-KPLR).

    About a year ago, Meredith and Media General were looking to merge, only for their proposed merger to unravel, on the count of Nexstar… if Meredith-Media General merger had proceeded without Nexstar interference, stations in 6 markets would’ve been required to be divested (Portland, OR, Greenville-Asheville, Hartford-New Haven, Springfield, MA, Nashville, and Mobile-Pensacola). If Meredith is still looking to sellout its broadcast division, I don’t know whether Scripps, Hearst, and Raycom have sniffed around Meredith… and I could see Scripps being front-runner to acquire Meredith stations (and stations in Nashville, Kansas City, Phoenix, and Las Vegas would have to be divested), if such a scenario were to occur.

  2. Sherry Nadolny says:

    Tribune owns our local station WHNT in Huntsville, AL. They have blacked it out because they can not come to agreement with Dish Network. Watching NBC now and starting to really enjoy it. If we have to we will connect to our old TV antenna and get WHNT for free. We never had to pay for using the air waves before and I think that Tribune is money hungry.

  3. Just remind you that TEGNA Media will soon be merging with Tribune to form a newly combined company starting later this year!!!

  4. Stacey K says:

    WGN America doesn’t have the reach of other networks as it is not in the majority of cable households (I don’t believe they have an agreement with Comcast, please correct me if I’m wrong). Not sure how they plan to support original programming when they don’t get those shows out there to be seen. WGN America had one of the best drama series, “MANHATTAN” for 2 seasons – barely supported the show the 2nd season then passed on a 3rd season renewal. WGN America did not get those Season 2 episodes streaming for those who didn’t get the network and never ran marathons in S2 to catch viewers up on the current season. “Manhattan” would have won Emmys if it had been on AMC or HBO; great programming is useless if you don’t promote it and you don’t get it out there.

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