Tribune Co. To Split Itself Into Two

Tribune Co. today 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 once-bankrupt media company, which last week announced it has will acquire Local TV LLC and the 19 television stations it owns in 16 markets across the country.

Tribune said the proposed 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 Co., 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 Co., which would consist of the company’s other principal businesses, including 42 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.

The company said that over the last several months, Tribune’s board of directors and management team evaluated a variety of strategic options intended to maximize shareholder value and position the company for long-term growth. As a result of this process, the board has authorized management to pursue the separation of the company’s primary lines of business, broadcasting and publishing.

“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-CEO. “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 12 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 Co. and Tribune Co. — 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.