Tribune has been seriously considering since January a spinoff of its broadcasting group, a break-up that could lead to the eventual sale of the rest of the company, the Wall Street Journal reports today
The move is one of many options under consideration as the company comes under increasing pressure because of its poorly performing stock, the paper said. The options include everything from the breakup of the entire company to the sale of certain “non-core assets,” which would presumably include Tribune’s small-market TV stations.
Tribune’s future has been in the news ever since the company announced plans last week to bolster its stock price by buying back $2 billion worth of its own stock.
According to the Journal, the Chandler family, which holds about 12% of the Tribune stock and three of the 11 seats of the Tribune board, voted against the stock buyback, but agrees that company should explore a broadcast spinoff.
Tribune’s broadcast group is a solid one, even though it lacks major network affiliates. The group includes stations in such major markets as New York, Los Angeles, Chicago, Philadelphia, Boston, Dallas and Washington.
The company’s equally prominent newspaper arm includes the Chicago Tribune and the Los Angeles Times.
Citing unnamed sources, the Journal said a spinoff of the broadcasting division would not happen until spring 2007. Like the recent separation of Viacom into two parts, the paper notes, “such breakups require meticulous planning to sort out the capital structure, infrastructure and management of the various pieces.”