JOHN YDSTIE, host:
And shareholders for the Chicago-based Tribune Company backed an $8.2 billion- plan to take the company private yesterday. The vote was expected, but there are plenty of challenges ahead.
NPR's David Folkenflik reports.
DAVID FOLKENFLIK: Shareholders said yes to selling Tribune at $34 a share to a group led by Chicago real estate magnate Sam Zell. Technically, it'll be owned by the employee stock option plan, but Zell will emerge as the company's chairman after personally investing only several hundred million dollars.
Tribune owns a bunch of major American newspapers, including the L.A. Times, the Chicago Tribune and Newsday, as well as more than 20 TV stations and the Chicago Cubs. But the plan creates a lot of debt - approximately $12 billion. The recent credit crunch could make it harder to borrow money. And Tribute's advertising revenues have faltered.
At yesterday's meeting, Dan Willet(ph) of the Teamsters Union was among the shareholders who were skeptical.
Mr. DAN WILLET (Teamsters Union): How can Tribune management justify the extremely rosy predictions for revenue and net income over the next several years? These predictions were used to justify the deal and the potential debt load, and yet they seem to run counter to both industry trends and analyst expectations.
FOLKENFLIK: Tribune's CEO Dennis FitzSimons says the deal will require some improvement.
Mr. DENNIS FITZSIMONS (Chief Executive Officer, Tribune Company): We have to now do better in interactive, reinforce our growth rates there, do better in broadcasting, and then do a better job of selling the print medium. All of those things will enable us to make the projections that we put out there.
FOLKENFLIK: FitzSimons says the deal still has solid financial backing. One more catch: federal regulators are taking a new look at Tribune's ownership of both TV stations and newspapers in several markets.
David Folkenflik, NPR News.