Correction: Tribune-Future Story

Convenience store customers reach for products at a news stand selling the Chicago Tribune, in a file photo from Feb. 1, 2006, in Chicago. Faced by continuing circulation declines at its newspapers and restive shareholders, Tribune Co. has so far rejected calls for a selloff of prize properties while instead shedding select TV stations and buying back its stock. (AP Photo/M. Spencer Green, File) (M. Spencer Green - AP)

A high-powered citizens group in Los Angeles released a letter to the Tribune's board last week in which it asked directors to either put more money into the Times or sell it. The Civic Alliance, which includes former U.S. Secretary of State Warren Christopher, expressed its concern that further staff reductions could erode the quality of journalism at the newspaper.

Chairman and CEO Dennis FitzSimons responded in a four-page letter Monday, saying the paper has improved since it was acquired by Tribune in 2000.

The LA Times has won 13 Pulitzer Prizes since then and Tribune has spent more than $250 million in capital investments at the paper while expanding the publication's emphasis on Southern California news.

"We hope you will evaluate the Los Angeles Times and its related Web sites, not on the ownership structure or the size of their editorial staff or budget, but on how well they serve the community's needs," FitzSimons wrote.

At the same time, Times Editor Dean Baquet publicly defied the corporate parent's budget-trimming plan in an interview with the paper, saying that the latest proposed cuts to the editorial staff "go too far."

While the resistance isn't likely to force Tribune's hand or cause it to dispose of its biggest daily, it underscores the company's heavy reliance on cost cuts to take the edge off weak results in recent years _ with decidedly mixed results. Analysts say FitzSimons, who is said to be working on a plan for Tribune's future, will have to look elsewhere if he makes changes.

"The most likely scenario for now is that they go on as is with their share repurchase plan," said analyst Dave Novosel of the research firm Gimme Credit. After that, he said, possible Tribune actions are "all over the board."

"Down the road might be the likelihood of going even further, such as selling the LA Times, the broadcast operations and one or two other newspapers, kind of the Knight Ridder strategy," Novosel said.

Knight Ridder Inc., then the nation's second-largest newspaper company, sold itself to McClatchy Co. this year after its biggest investors became frustrated with the company's stock performance. Industry observers think Tribune is not nearly at that point, with no evidence of an imminent shareholder rebellion.

But in an age of shareholder activism, a revolt can't be written off _ especially since the stock has risen only moderately since the company decided to pursue a $2 billion stock buyback funded by cutbacks, loans and the sale of at least $500 million in assets.

In an industry reeling from the loss of readers and advertising to the Internet, no company turnaround is yet under way. Tribune said earlier this month that a continuing drop in circulation revenues contributed to a 1.6 percent decline in August sales.

If investors' patience dissolves, Tribune could be forced to review its pledge to retain its holdings in the three largest U.S. cities: New York, Los Angeles and Chicago.

What about the possibility of the media giant ending its 25-year ownership of the baseball Cubs, which by some estimates could fetch Tribune $500 million?

As with its opposition to a sale of the Times, analyst James Goss of Chicago-based Barrington Research Associates said that transaction wouldn't be Tribune's preference.

"In some ways, selling the Cubs would be very appealing and would raise a lot of cash. Yet I think they still view the Cubs as important in their superstation strategy," since its broadcasts on cable superstation WGN are lucrative.

Besides the Cubs and WGN, Tribune's holdings include 11 daily newspapers, 25 TV stations, WGN-AM radio and Internet ventures.

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