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Tribune Empire Could Crumble
When the Tribune Co. acquired the Los Angeles Times, above, it also brought in the Times' longtime owners, the Chandler family. Their presence in the Tribune Tower, left, has not always been welcome.
(By David Mcnew -- Getty Images)
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"The Wall Street angle has got everybody uptight, of course," said Pulitzer prize-winning Tribune columnist Clarence Page. "Even though the paper is making healthy profits, Wall Street doesn't think we have a future."
How did it get to this point at Tribune, and where will it go from here?
For 159 years, Tribune has towered over much of the newspaper industry like its headquarters, the gothic Tribune Tower in Chicago. The storied Tribune is the voice of the Midwest. It was the broad-shouldered sparring partner of Mayor Richard Daley's political machine and the home of name writers such as Mike Royko, Gene Siskel and Bob Greene. Tribune's ownership hold on Chicagoland includes radio and television stations WGN and even the Cubs. It was a solid, mid-size media company before its 2000 purchase of Times Mirror.
But along with the Times Mirror papers came the Chandler family, longtime owners of the L.A. Times.
Former publisher Otis Chandler, who died in February at 78, was credited with turning the underachieving paper into a national powerhouse by expanding its staff and increasing its quality. The 2000 merger with Tribune put three Chandlers on the board and gave them 15 percent ownership. In June, upset over Tribune's stock slide and the value of their investment, the Chandlers wrote a letter to the board urging a sell-off.
These Chandlers, said one newspaper analyst, do not share Otis Chandler's values.
"They're not folks that necessarily have any feeling about the journalistic history of their papers," said analyst John Morton. "What they want is their money, and that's what they've always wanted." A spokesman for the Chandler family declined to comment.
Much speculation has swirled about potential celebrity buyers for the L.A. Times, including entertainment mogul David Geffen, but the tax burden of selling off big, high-value papers one-by-one would make such a sale too costly to execute, industry experts said.
One possible scenario, advanced by an industry insider who asked not to be identified because the Tribune process is ongoing, plays out like this: Tribune keeps WGN television as a legacy property and groups its remaining stations in one package, selling them in a tax-efficient way. The source said Tribune floated such a proposal in the spring, which roused interest, pulling it back when the Chandler crisis emerged in the summer.
Then, Tribune buys the outstanding public stock and goes private, the source speculated, allowing the Chandlers to cash out or remain invested in the new private company with more cash in their pockets.
