Friday, November 30, 2007

Waivers granted

The commission voted 3-2 to grant cross-ownership waivers and the transfer of Tribune's broadcasting licenses. The waivers will last for two years or six months after any legal challenge to either the granting of the waivers or to proposed changes to the FCC's wider media ownership rules. and LAObserved Tribune shares closed today at $31.04.
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Thursday, November 29, 2007

FCC votes tomorrow, but more hurdles ahead

The commission will vote on the proposal tomorrow which if approved, will preserve Tribune's hold on its TV stations and newspapers in Los Angeles, Chicago, New York, Orlando, Baltimore and Hartford and allow it to move forward with its plan to go private. (According to, the Orlando and Baltimore papers could be unloaded in asset sales next year if the New Tribune needs cash.)

But Tribune must pass two other hurdles: it needs a solvency opinion from an outside financial expert and has to show that its debt load after the sale is not more than nine times the cash flow in the 4 fiscal quarters before the closing.

And then there's the interest rate on the loans that will need to be worked out.

Bets are the deal will go through. But at what price to the workers? What will be the impact on the thousands of employee-owners — their work and their pocketbooks — when the New Tribune tightens its financial belt to meet its new $13 billion debt payments?

BTW: Shares closed up at $30.99.

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Wednesday, November 28, 2007

FCC delivers

Two-year exemption for Tribune should clear the way for the Zell Deal to be completed on time.

FCC Chairman Kevin J. Martin has proposed to deny Tribune's request for open-ended waivers from the commission's so-called cross-ownership rule, which normally would give the company six months to divest its media properties to come into compliance. But Martin has proposed to give Tribune a two-year waiver from any divestiture.

The waiver would give the commission time to vote on Martin's broader proposal to eliminate the so-called cross-ownership ban in the nation's top 20 markets. Under that plan, Tribune would be free to operate its newspapers and TV stations in Los Angeles, New York, South Florida, and most likely Chicago, but would have to divest either its paper or two TV stations in Hartford, Conn. The waiver would apparently allow Tribune to keep the Hartford properties for two years. LAT
FitzSimons said in a press release: "We are pleased with Chairman Martin's proposal which, if approved, will enable Tribune's going private transaction to close by the end of the year. This will allow Tribune's local media outlets to continue their commitment to outstanding journalism and service to our readers, viewers, listeners and advertisers."

Investors responded: Shares closed up 10.09% at $30.00

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Source: Zell Deal could get FCC waivers this week *

CT's Michael Oneal reports that according to a source at the FCC, Chairman Martin circulated a proposal among the 4 other commissioners addressing Zell and Tribune's request for temporary waivers. Though the particulars of the proposal aren't known, if the language is close to what Tribune asked for and the commissioners approve it by Friday, Tribune's Zell Deal will have the time to close by the end of the year.

* Update: According to people familiar with the proposal, Tribune Co. will be exempted for six months from rules prohibiting ownership of newspaper and TV stations in the same market. But .... LAT

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Tuesday, November 27, 2007

Tribune's October revenues down 9.3% *

Publishing revenues fell 7.9% in the year-ago month. Advertising revenues continue to slide, dropping 7.8% for the month, with the worst performance coming from classified advertising, which fell by 19.2%.

Shares in the company fell $1.23, or 4.3 percent, to $27.37 Tuesday.

More at Chicago Tribune,

*Update: Did Tuesday's cancelled FCC meeting spook investors too?
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Monday, November 26, 2007

HC columnist: I pray they sell us *

* Corrected
Susan Campbell weighs in on FCC chairman Martin's proposal to lift the ban on media company cross-ownership in larger markets but continue the restrictions in not-so large markets like Hartford which would force Tribune to sell either the Hartford Courant or the 2 local TV stations.

With respect to my fellow corporate-trough diners in TV, I pray they sell us. I'm spending the holiday thankful I have a job, and I'm praying that very soon I am holding down that same job but answering to someone else. I hold out hope that local ownership is a big part of the answer to the malaise that affects American newspapers. I am thankful that I work for a corporation that gave me a good dental plan, but I am willing to trade my teeth for a (local) owner who gets it.
Susan thinks Courant employees should buy the paper.

That's not a far-fetched idea. The Newspaper Guild and its advisers Duff & Phelps and Ownership Associates can identify buyers who would consider sharing ownership with employees.

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Cost-cut fallout: Unhappy readers in Hartford, Orlando

When Tribune's Orlando Sentinel killed it's TV Time for non-subscriber sales, readers weren't happy. One reader bought 3 Sunday papers at 3 different locations before he determined the TV listing section had been omitted deliberately. The reader complained, "You did not have any notice whatsoever for people. . . . You left [us] in the dark. You treated [us] unfairly."

At the Hartford Courant, readers want more from their paper and are unhappy with Page One ads, shrinking comics, smaller crossword puzzle squares and numerous copy editing errors and typos created by "the introduction of a new production system" that "has challenged some of the best Courant copy editors", according to the HC's readers representative.

These days because newspapers are businesses desperate to find a new business model that will save them, they must find cost efficiencies wherever they can. But reader expectation of quality should not be underestimated or ignored.

Stripping a newspaper of reliable, quality content readers want will guarantee continued declines in circulation. (end of post)

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Saturday, November 24, 2007

Message to Big Media: Share!

Newspaper Guild/CWA members were among thousands of unionized actors, musicians, drivers, nurses, dock workers, broadcast technicians, production workers, farm workers and service providers who joined the striking film and TV writers (Writers Guild of America/West) in a rally last Tuesday on Hollywood Boulevard. More than 10,000 writers are standing up to corporate power in their demand to preserve decent working standards and for a fair share of the hefty profits generated by the media companies from their creative work.

The industry is shifting toward new, digital media and the writers — without whom the companies have nothing — should be paid for their work when it is broadcast, streamlined or downloaded over the Internet. From a WGA fact sheet:

"What the media conglomerates are proposing is that there will be no Writers Guild jurisdiction over nearly all writing originally for the Internet, though nearly all writing will likely be transmitted this way. If we agreed to this proposal that could mean no more Writers' Guild, no more health and pension benefits, and no ability to make a fair salary. Writers want a tiny slice (2.5%) of the revenues that big Media earns when their shows or movies run on the Internet."
Alone, a working person — a writer, an actor, a journalist, a musican — can not compete with the squeeze for megaprofits Big Media doesn't want to share. Unions are necessary — and effective — in the fight fair a fair deal.

And in the fight for a fair share.

Mark your calendar: The International Affiliation of Writers Guilds, which represents 21,000 screenwriters in guilds worldwide, has set Nov. 28 as an international day of solidarity to show support for the WGA strike.

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Monday, November 19, 2007

Zell personally lobbied Martin

According to this LAT story, Zell met with Martin recently to lobby for waivers. Tribune execs want the waivers to avoid getting caught up in the media ownership controversy, one that could continue well into next year.

Most believe the Deal will be completed, but it doesn't look good for a done deal on schedule.

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Thursday, November 15, 2007

LAT's 'Altered Oceans' wins another prestigious award

The 2007 AAAs Science Journalism Awards honor excellence in science reporting for print, radio, television and online categories. Kenneth Weiss and Usha Lee McFarling's ambitious series that examined the profound disturbances that have been occurring in the ecology of the world’s oceans also won a 2007 Pulitzer Prize.

“The Altered Oceans series was an unusual undertaking for a newspaper,” Weiss said. “There was no single dramatic event like a hurricane or tsunami. No mass human deaths. Instead, we looked at the slow creep of environmental decay — the kind of changes that most people never notice.”

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Wednesday, November 14, 2007

Rumors of LAT building sale re-surface *

LA blogger and journalist Joe Scott says there's buzz among major real estate brokers that Tribune intends to sell the LAT building and the block it sits on. Will Zell sell Tribune Tower, LAT bldg?

* Tribune can't sell the a building it doesn't own. LAT publisher puts a lid on the rumor/buzz: LAObserved
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Two FCC commissioners ready to give Tribune waivers

From E&P:

In a joint statement, Commissioners Michael J. Copps and Jonathon S. Adelstein say FCC Kevin Martin is using the Tribune deal to rush passage of the changes to the newspaper/broadcast cross-ownership rules he proposed on Tuesday. Copps and Adelstein have been outspoken opponents of easing or eliminating regulations prohibiting common ownership of a newspaper and broadcast property in the same market.

"We realize there is some urgency with respect to the Tribune transaction," Copps and Adelstein said. "The chairman, however, has refused to act on Tribune's waiver requests that would permit the transaction to close. Let us be clear: it is improper to hold the Tribune hostage in order to force a vote on media ownership before the end of the year. We are prepared to vote on the Tribune waiver requests within three working days after the Chairman circulates a draft decision. There is simply no excuse for using Tribune as a human shield."
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Tuesday, November 13, 2007

FitzSimons speaks

In a memo to employees, Tribune's CEO said the cross-ownership rules change in just the big markets doesn't go far enough and the company will "seek an expansion of the cross-ownership relief beyond that contained in Chairman Martin's proposal."

"The Chairman previously said that he expected the commission to act on our application within 180 days -- we're now beyond that timeframe," FitzSimons wrote. "The content of today's proposed rule change and Chairman Martin's aggressive timetable for voting on it are likely to face challenges in the weeks ahead and there will be a great deal of speculation in the media about its impact. In addition, the proposal as currently written is likely to need further clarification. Until that clarification, we are declining to comment publicly about the proposal."
If the Zell Deal doesn't close by year's end, financing costs for the $34 per share buyout will be higher or, give the four investment banks — JPMorgan Chase, Bank of America, Citigroup and Merrill Lynch — a basis for withdrawing the $4.2 billion commitment. (Remember those material adverse effects clauses?)

Tribune shares closed up 62¢ today at $28.53.

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Martin to propose rule change for large markets only

In a New York Times editorial today, the Commission chair makes his case for modifying the cross-ownership rule for the largest markets only. Martin wrote:

A company that owns a newspaper in one of the 20 largest cities in the country should be permitted to purchase a broadcast TV or radio station in the same market.
The ban on newspapers owning a broadcast station in their local markets may end up hurting the quality of news and the commitment of news organizations to their local communities. Newspapers in financial difficulty often have little choice but to scale back news gathering to cut costs. Allowing cross-ownership may help to forestall the erosion in local news coverage by enabling companies that own both newspapers and broadcast stations to share some costs.
Martin told journalists on a conference call Tuesday morning that he hoped the modest reform he was proposing would address the concerns of critics opposed to any change.

An open letter to Kevin Martin: People understand threat of big media; so should FCC chairman.

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Monday, November 12, 2007

Congress: FCC's Martin moving too fast to scrap rules

Martin has deployed the Tribune deal as a kind of political hostage in his confrontation with Congress, making for a situation that seems strange to outside observers: the FCC is threatening a deal it actually supports, to force through rule revisions that would limit its own power. MediaDailyNews

Some senators are threatening legislation that would force Martin to wait at least 6 months before holding the vote Martin has scheduled for Dec. 18.

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Tuesday, November 6, 2007

Zell's comments raise speculation in Allentown

Folks in Allentown have no doubt followed published reports for months now about the Tribune sale, the Zell Deal, ESOPs and undefined material adverse effects clauses, but comments published in The New Yorker must have really captured their interest. Zell was quoted as saying: "I've had offers on every single asset in the portfolio. Chuck Schumer calls me, because he's hustling for some people who want to buy Newsday. Baltimore people are calling, Allentown's calling, Florida's calling, and, in L.A., David Geffen and Eli Broad."

Tribune said in March that it had no plans to sell The Call, though it had 2 Connecticut papers on the block as part of a corporate restructuring plan. Under the Zell Deal, there's a big tax incentive to keep the company intact for 10 years.

''Sam Zell is not known for selling at the bottom, which is where the newspaper industry is these days,'' said John Morton, a news industry analyst in Maryland. ''I don't think selling is something Sam Zell would be interested in.''
Well, who's to say there won't be solid incentive offers attractive enough for Zell to sell off some of the papers — sooner than later — right after the Deal is done. The money people calling Zell to express interest in the papers must know there's a chance, if not a possibility, he'll sell.

Speculation from every corner will continue until the Deal is done. Zell has everyone's attention, but most especially the future employee-owners who under the multi-billion dollar deal stand to gain big but lose bigger if the company fails.

Zell's track record as a moneymaker is impressive. He doesn't lose. But in this, the most leveraged deal ever, the employees carry the greatest risk. So how come he's getting all the ink and not them?

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Monday, November 5, 2007

Former LAT editor says Zell favored over Tribune guys*

Perhaps Sam Zell is not an ideal newspaper owner, but "If you took a vote in the L.A. Times newsroom today, they would vote Zell in and the Tribune guys out. They’re hoping and praying the deal will go through,” Dean Baquet told Connie Bruck for The New Yorker profile that sheds more light on Zell's business practices (he would be “chairman of everything, C.E.O. of nothing”), his personality and politics ("I'm an economic conservative and a social liberal").

If the Deal gets done – and there's a whole lot of folks with fingers crossed that it does — will Zell sell off some of the papers?

“I’ve had offers on every single asset in the portfolio. Chuck Schumer”—the New York senator—“calls me, because he’s hustling for some people who want to buy Newsday. Baltimore people are calling, Allentown’s calling, Florida’s calling, and, in L.A., David Geffen and Eli Broad. So all I can tell you is that for a dead industry with no future there are an awful lot of schmucks who want to take it away from me!”
* LAObserved breaks out other important stuff
Bloomberg News Photo (end of post)

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