Tribune Publishing will take over company's publishing assets, Tribune Co. will be for its broadcasting holdings
Tribune Company has announced its intent to pursue the separation of its broadcasting and publishing businesses into two distinct companies.
The proposed transaction is the latest step in the transformation of the dynamic media company, which last week announced it has entered into an agreement to acquire Local TV Holdings and the 19 television stations it owns in 16 markets across the country, including KTVI-FOX 2 in St. Louis. (Tribune already owns two stations in Indianapolis — WXIN-FOX 59 and Indiana's 4 WTTV, as well as KPLR 11 in St. Louis, which has been operated by Local TV's KTVI.)
The separation is designed to maximize shareholder value through the spin-off of Tribune’s publishing assets to an independent company and the tax-free distribution of shares in that company to the stockholders of Tribune. The two companies that would exist following the separation would be:
- Tribune Publishing Company, which would become home to Tribune’s publishing assets, including the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, The Morning Call and Daily Press.
- Tribune Company, which would consist of 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 valuable portfolio of real estate assets.
“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,” said Peter Liguori, Tribune’s president and chief executive officer. “In addition, the separation is designed to allow each company to maximize its flexibility and competitiveness in a rapidly changing media environment.”
During the next nine to twelve months, Tribune’s management team plans to develop detailed separation plans for the company’s board of directors to consider. Upon the closing of the proposed transaction, each entity — Tribune Publishing Company and Tribune Company — would have its own board of directors and senior management team.
“The two companies resulting from this transaction would each have revenues in excess of $1 billion and significant operating cash flow,” said Liguori. “We expect that this transaction will serve our shareholders and employees well, and put these businesses in a strong position for continued success.”
The completion of Tribune’s separation into two companies is subject to a number of important conditions, including the receipt of regulatory approvals, opinions from tax counsel, further due diligence and the effectiveness of appropriate filings with the United States Securities and Exchange Commission.