Shareholders of Tribune Co. overwhelmingly approved the $8.2 billion buyout of the media conglomerate Tuesday, but the transaction still needs financing and federal waivers.
Preliminary results indicated 97 percent of those casting votes approved the deal led by billionaire Sam Zell.
The vote approving the deal was one of the simplest steps in the tedious path to new ownership that began when the ailing newspaper publisher put itself up for sale last year.
The media conglomerate owns 11 daily newspapers, including the Chicago Tribune, 23 TV stations and Major League Baseball's Chicago Cubs.
The deal still needs the Federal Communications Commission to grant it waivers from rules banning same-market ownership of television and newspapers. After that, it will have to navigate in a troubled newspaper industry while under a huge and increasing debt burden.
"This is the beginning of the next chapter," said Dave Novosel, an analyst with the bond research firm Gimme Credit. "Next will be trying to solve that debt."
Tribune already has borrowed $7 billion to finance the first step of the transaction and buy back shares but had to commit to repaying $1.5 billion of it in two years in order to secure the loan.
Should federal regulators approve the deal, Tribune Co. will have to borrow an additional $4.2 billion to buy all remaining shares not owned by the employee stock ownership plan.
Concerned about that debt load, the credit-rating agency Standard & Poor's lowered its rating on Tribune's debt on Monday, citing a deterioration in operating performance and cash flow since the deal was announced nearly five months ago. The rating agency lowered Tribune debt — already carrying junk-bond status — to "B+" from "BB-" and said it would reduce it further once the leveraged buyout is complete.
From NPR reports and The Associated Press