Dec 28 The Tribune Co, owner of the Los Angeles
Times and the Chicago Tribune, will emerge from bankruptcy on
Dec. 31, sources said on Friday, ending four years of Chapter 11
protection and setting the stage for the new company to sell off
its newspapers to focus on the WGN cable channel and other TV
The Chicago-based company expects to emerge with all of its
assets, which include eight major daily newspapers and 23 TV
stations, and to name former Fox TV and Discovery Communications
executive Peter Liguori as chief executive, according to two
people with knowledge of the company's plans but who are not
authorized to speak to the press.
In early December, Tribune owners began interviewing
investment bankers to sell some or all of its newspapers. Among
those interested are San Diego Union-Tribune owner Doug
Manchester and Orange County Register owner Aaron Kushner,
according to people familiar with the situation.
On Dec. 14, Warren Buffett hinted he would be interested in
buying at least one Tribune newspaper, the Morning Call in
Gary Weitman, a Tribune spokesman, had no comment.
Oaktree Capital Management, JPMorgan Chase & Co and Angelo,
Gordon & Co, the controlling Tribune owners, made the decision
to sell off its print business to focus instead on Tribune's
television operations, which include stations in New York, Los
Angeles, and Chicago.
In November, Tribune received regulatory approval from the
Federal Communications Commission to transfer its broadcast
licenses to the owners who will take over the company when it
emerges from bankruptcy.
Tribune's WGN America is a national news feed of its Chicago
station, which it repackages as a super-station and distributes
via cable and satellite to more than 76 million homes, according
to Nielsen Co data.
Liguori is expected to build Tribune's TV operations,
including through acquisitions. Former Disney strategic planning
chief Peter Murphy will be added as a board member and will
Tribune's TV operations are estimated to account for $2.85
billion of the company's $7 billion valuation, while its
publishing assets are estimated to represent $623 million,
according to a report by its financial adviser, Lazard. The rest
of its value is in other assets, including its stake in the Food
Network and its cash balance.
Despite its low valuation relative to the rest of the
company's assets, Tribune's newspaper unit is profitable.
Tribune's move to shed its newspaper assets was expected by
industry observers, who have noted the twin challenges of
declining readership and a plunge in advertising revenue
wracking the newspaper industry.
The industry lost almost half of its advertising revenue in
a five-year period and is now down to $24 billion, according to
the Newspaper Association of America trade organization.
The declining fundamentals of newspapers, coupled with the
large amount of debt Tribune carried, forced it into a long and
complicated four-year bankruptcy case.
Real estate investor Sam Zell took control of Tribune in
2007 through a leveraged buyout that saddled it with $13 billion
in debt just as the newspaper industry hit its downturn.