FCC Clears Tribune Co. Sale
Saturday, December 1, 2007; 6:56 AM
WASHINGTON -- The Federal Communications Commission approved the $8.2 billion buyout of the Tribune Co. by a 3-2 vote Friday, a move that will allow the deal to close by the end of the year.
In approving the deal, the agency granted Tribune Co. a temporary waiver on rules barring ownership of both a newspaper and a broadcast station in the same city in four markets and a permanent waiver for the city of Chicago.
Tribune Co. is owner of The Los Angeles Times, The Chicago Tribune, nine other dailies and 23 television stations. The buyout is being led by real estate billionaire Sam Zell and will result in the publicly traded company becoming private.
The three Republican commissioners voted in favor of the sale while Democrats Michael Copps and Jonathan Adelstein were opposed.
The company currently owns both newspapers and broadcast stations in five markets: New York City, Chicago, Miami-Fort Lauderdale, Los Angeles and Hartford, Conn. It needed the waivers before it could complete the sale.
FCC Chairman Kevin Martin has proposed a permanent rule that would allow one company to own a newspaper and a broadcast station in any of the 20 largest markets. The full commission is set to vote on the proposal by Dec. 18. While Martin's plan would grant Tribune some relief, it still would have pushed the closing date for the sale into next year, which the company has said would jeopardize financing for the deal.
Martin began circulating the temporary waiver plan among the other four commissioners on Tuesday. The chairman, anticipating that the ownership rules may be challenged in court, said Tribune Co.'s waivers, except for Chicago, will last six months after any potential litigation is concluded, or two years, whichever is later.
Martin's proposed permanent ownership rule states that if a television broadcaster wants to buy a newspaper, the station may not be ranked among the top four in the market. That posed a potential problem for the company in Chicago, where Tribune Co. owns WGN-AM, WGN-TV and The Chicago Tribune.
But the FCC order grants Tribune Co. a permanent waiver in the Chicago market, noting that the combined ownership dates back decades and was grandfathered when the rule was originally adopted.
Tribune said in a press release Friday the transaction is expected to close by year's end "following satisfaction of the remaining closing conditions, including the receipt of a solvency opinion and completion of the committed financing."
"We appreciate today's action by the FCC, which allows our transaction to move forward," said Tribune chairman and CEO Dennis FitzSimons. "We look forward to implementing the new ownership structure that will enable us to focus all of our energy and resources on Tribune's future."
The buyout plan calls for the company to be owned by an employee stock ownership plan. Zell, whose investment in the company will increase to $315 million, according to Tribune, will become chairman.