Gannett To Buy 2 Tribune Co. Newspapers
Friday, March 2, 2007
Tribune Co. has agreed to sell its two smallest newspapers, both in Connecticut, to Gannett for more than $65 million, as the media giant edges closer to accepting or rejecting bids for the entire company.
Tribune said in September that it planned to sell $500 million in assets. As part of the sale, Tribune offered the Greenwich Time and Stamford Advocate to two prospective buyers, McLean-based Gannett and MediaNews Group of Denver, according to a source familiar with the sale who spoke on condition of anonymity because the deal has not been announced.
Gannett eventually outbid MediaNews for the two papers, which report a combined circulation of 39,623. The details of the deal are still being settled, the source said.
Spokesmen for Tribune and Gannett declined comment.
Tribune is considering offers for its remaining nine newspapers, 25 broadcast properties, the Chicago Cubs and other assets. It has said it will decide by the end of the month. The Tribune board is also weighing a "self-help" plan that would spin off the television stations into a new company against three bids: one from Chicago real estate mogul Sam Zell, another from Southern California billionaires Eli Broad and Ronald Burkle, and a third from the Chandler Trusts, Tribune's largest shareholder.
Tribune sought as much as $75 million for the Connecticut papers and $25 million more for the real estate on which they sit, which is likely to be sold to third parties.
Even though Tribune has received offers for some of its largest properties, such as the Los Angeles Times and the Baltimore Sun, the company has been reluctant to sell its big assets piecemeal because of the large tax bills that would be incurred. If Tribune ends up receiving a total of $100 million for the Connecticut papers and their real estate, the company will pay taxes in excess of $30 million, the source said. But for a company valued at $7.2 billion, a tax bill of that size is "inconsequential," the source said.
Tribune's Connecticut papers are geographically close to papers owned by Gannett and would allow the company to save money by combining the resources of its new properties with its existing ones. Gannett owns the Norwich Bulletin in Connecticut and the Journal News in nearby Westchester County, N.Y.
Tribune has also sold two television stations and Hoy, its Spanish-language newspaper in New York, since the September announcement.