Tribune Co. Handling of 'L.A. Times' Irks Chandlers
ALEX CHADWICK, Host:
More business news now, or maybe it's news of business. Anyway, one of the nation's most prominent media companies is under assault from members of its own board of directors. It's the Tribune company, which owns the L.A. Times, the Chicago Tribune, and Newsday, and eight other papers, and 26 televisions stations, and the Chicago Cubs. The wealthy Chandler family of Southern California sold the L.A. Times to the Tribune six years ago, and in the process became the number two shareholder of the Tribune Company. Now the Chandlers say the Tribune has mismanaged everything, they want the company broken up, and maybe the L.A. Times will go back for sale. David Folkenflik, who covers media for NPR, is with us. David, more on the Chandlers and this situation here. What is going on?
DAVID FOLKENFLIK reporting:
The Chandlers are the descendents of what we think of as the founding family of the modern day Los Angeles Times. And in 2000, they sold Los Angeles Times, several other major papers - including Newsday and the Baltimore Sun - to the Tribune Company. Now, six years later, they're essentially trying to unspool that deal. They want to either have the company broken into separate television and newspaper parts so it can each concentrate on its core business, or they want the whole thing sold altogether. They say that Tribune's management has failed in its strategy to yield greater profits through knitting together these major markets - New York, Chicago, Los Angeles. And also through kind of leveraging the joint television and print properties into increased profits. It just hasn't happened that way.
CHADWICK: Isn't this just about the fact that newspapers are having such a difficult time all across the country? So many of them are because people are using the Internet now. Maybe the Chandlers just kind of got out at the right time and now for some reason they want back in.
FOLKENFLIK: There's no question that the Tribune Company has been beset by the same kinds of problems that have hit all newspaper companies. At the same time, Tribune stock has really plummeted very, very badly. What they haven't been able to deliver is increased profits year over year to Wall Street investors, which is precisely what they promised.
CHADWICK: Well, okay. The Chandlers have written this letter to the Tribune board, saying we don't like what's going on and we kind of want to call it all off. Are they going to be able to get their way? And if they do, what happens?
FOLKENFLIK: Well, that's a very good question. The Chandler Family Trust control about 12 percent of Tribune's stock. I've talked with some investors who say they actually back management's strategy at Tribune, and it's not clear that they will attract enough support to force out the leadership of the Tribune or to take over the board.
What they may be able to do, however, is force the Tribune to consider some of these sales - to consider some way in which to compensate the Chandler family. They clearly want to unlock some of the value of their assets, and they want to do it in such a way that they're not hit with a huge whammy on their taxes because of how complicated their family trust is set up.
CHADWICK: You know, David, if they can't agree on anything, this could turn into a great reality TV show: What to do with the Times?
FOLKENFLIK: Well, that's a very fair question. It's one of the largest newspapers in the country. There's been some major figures - particularly in L.A. - who've expressed real interest in it: Peter Ueberroth, the former baseball commissioner, Eli Broad, the businessman and philanthropist, also David Geffen, the music mogul out there. If the Times were to be sold off, it would be a major thing to occur. So it might be a grist for the show, indeed.
CHADWICK: Stay tuned. NPR's David Folkenflik. Thanks, David.
FOLKENFLIK: You bet.
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