10 Jul Tribune Announces Intent to Pursue Separation of Broadcast and Publishing Businesses
Separation Designed to Maximize Shareholder Value, Provide Greater Financial and Operational Focus
Latest Step in Continuing Transformation of Dynamic Media Company
Tribune Company today announced its intent to pursue the separation of its iconic broadcasting and publishing businesses into two distinct companies, each with greater financial and operational focus, the ability to tailor its capital structure to its specific business needs, and a management team dedicated to seizing strategic growth opportunities with maximum flexibility. 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.
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 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.
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 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. While Tribune Company intends to pursue the separation of its broadcasting and publishing businesses, there can be no guarantee that the transaction will be concluded or assurances as to transaction terms.
TRIBUNE MEDIA COMPANY is home to a diverse portfolio of television and digital properties driven by quality news, entertainment and sports programming. TRIBUNE MEDIA is comprised of Tribune Broadcasting’s 42 owned or operated local television stations reaching 50 million households, national entertainment network WGN America, available in 72 million households, Tribune Studios, and Tribune Digital Ventures, including the websites Zap2it and TVByTheNumbers, and Gracenote, one of the world’s leading sources of TV and music metadata powering electronic program guides in televisions, automobiles and mobile devices. TRIBUNE MEDIA also includes Chicago’s WGN-AM, the national multicast networks Antenna TV and THIS TV. Additionally, the company owns and manages a significant number of real estate properties across the U.S. and holds other strategic investments in media.
Cautions Concerning Forward-Looking Statements
This press release contains certain forward looking statements that are based largely on Tribune’s current expectations and reflect various estimates and assumptions by Tribune. These statements may be identified by words such as “intend,” “expect,” “anticipate,” “will,” “implied,” “designed,” “assume” and similar expressions. Forward looking statements are subject to certain risks, trends and uncertainties that could cause actual results and achievements to differ materially from those expressed in such forward looking statements. Such risks, trends and uncertainties, which in some instances are beyond Tribune’s control, include underlying assumptions or expectations regarding the proposed transaction, such as the ability to realize anticipated benefits related to the proposed transaction, Tribune’s ability to achieve requisite regulatory approvals for the proposed transaction, unanticipated developments that delay or negatively impact the proposed transaction, changes in market conditions, disruption to business operations as a result of the proposed transaction; and the ability to retain key personnel. There can be no assurance that the proposed transaction will be completed as anticipated or at all. Tribune is subject to additional risks and uncertainties described in Tribune’s quarterly and annual financial statements, related management’s discussion and analysis of financial condition and results of operations and the information contained therein, which are made publicly available via its website, www.tribune.com. Any forward-looking statements in this press release should be evaluated in light of these important risk factors. This press release reflects management’s views as of July 10, 2013. Except to the extent required by applicable law, Tribune undertakes no obligation to update or revise any information contained in this press release beyond the published date, or for changes made to this press release by wire services, Internet service providers or other media, whether as a result of new information, future events or otherwise.