by James Natalie

 

History

Founded in 1847, the Tribune Company has demonstrated its powerful stance in the media industry as its newspapers, television stations, radio stations, and websites now reach over 80 percent of households nationwide. [1]

After its television division started out in 1948 with the establishment of WGN-TV in Chicago and WPIX-TV in New York, two stations that proved to be the heart of Tribune Television, Tribune Television continued to prosper and in 1981 the Tribune Broadcasting Company was born. Already having acquired a third television station, Denver’s KWGN-TV, Tribune Broadcasting went on to buy stations in Atlanta, New Orleans, Los Angeles, Philadelphia, and Boston in years to follow.

However, popular for its Chicago Cubs baseball broadcasts on WGN-TV and WGN Radio, Tribune Broadcasting Company’s first order of business in 1981 was stringing a deal with the Wrigley family to purchase the Chicago Cubs baseball team for a total of $20.5 million. WGN-TV, along with WGN Radio, have been broadcasting Cubs games ever since. [1]

Noteworthy events for Tribune’s television stations:

• 1958: KGWN-TV begins as Denver’s first television station.
• 1958: Los Angeles’ KTLA-TV is first television station to own a helicopter for news reporting.
• 1959: WPIX-TV introduces the instant replay method during a New York Yankees baseball game. [1]

Key Personnel

Samuel Zell – Chairman of Tribune Company

Eddy Hartenstein – President and CEO, Tribune Company; Publisher and CEO, Los Angeles Times

Nils Larsen – Chief Investment Officer, Tribune Company; President and CEO, Tribune   Broadcasting [2]

 

Current Rankings

The Tribune Company is currently ranked as the 22nd most leading media company in the United States. As of September 30th, 2012, Tribune Company has recorded a 3% decrease in net U.S. media revenue from $3.20 billion in 2010 to $3.11 billion in 2011. Within that span, Tribune’s broadcast TV medium (Tribune Broadcasting) net U.S. revenue also dropped from $748 million to $715 million. [3]

However, Tribune Broadcasting has affiliates in New York (WPIX-TV), Los Angeles (KTLA-TV), Chicago (WGN-TV), Philadelphia (WPHL-TV), and Dallas-Fort Worth (KDAF-TV). [4] According to the Nielsen 2012-13 DMA ranks effective September 22nd, 2012 for the 2012-2013 TV season, these markets rank 1-5 respectively and are estimated to reach nearly 19.3% – almost one-fifth – of the United States collectively, totaling 22,019,930 homes. [5] With these affiliates representing WPIX, WGN, myTV, and CW, they carry a number of popular syndicated programs such as Two and a Half Men, The Big Bang Theory and Friends. In addition, with these WPIX, WGN, myTV, and CW stations having their own local news, Tribune relies heavily on these five stations as a constant source of revenue despite the recent downward trend. [6] [7] [8] [9]

Tribune Broadcasting has bigger affiliations with major networks such as FOX and ABC. Tribune has seven FOX affiliated stations, all within Neilsen’s top 50 estimated markets for the 2012-2013 TV season – Seattle-Tacoma (#12), Sacramento-Stockton-Modesto (#20), Indianapolis (#26), San Diego (#28), Hartford & New Haven (#30), Grand Rapids-Kalamazoo-Battle Creek (#39), and Harrisburg-Lancaster-Lebanon-York (#43). Tribune’s one ABC affiliate in New Orleans ranks just outside the top fifty, coming in at #51. For the full rankings click here.

FOX has enjoyed the early 2012-2013 season success of its shows such as New Girl and The X-Factor, while ABC has watched its 2012-2013 season start with a bang as its popular programs such as Modern Family, Grey’s Anatomy, Once Upon a Time, Revenge, and The Middle dominated the season premiere ratings. These affiliates prove to be some of Tribune Broadcasting’s biggest investments for constant revenue. [10]

Current Activities

The Tribune Company is clearly experiencing financial difficulty and trying to stay alive in the broadcasting industry to keep up with its competitors. In December 2007, Tribune was bought out by current Chairman Samuel Zell for $8.2 billion, but a year later in December 2008, Tribune filed for Chapter 11 bankruptcy. Zell’s buyout is believed to have been completed by using mostly borrowed money from banks, therefore raising Tribune’s debt to $13 billion at the time bankruptcy was filed. Much of the turmoil over the past years has not fully receded, but Tribune is now on the back end of this deal and concentrating on solving it. [11]

July 23, 2012

Tribune Company’s Chapter 11 bankruptcy was signed off by Judge Kevin Carey, allowing the company to be owned by a number of hedge funds and banks.

Under the order, Oaktree Capital Group LLC, JP Morgan Chase & Co., and Angelo, Gordon & Co. will be the new primary owners of the Tribune Company. [12]

August 9, 2012

Several groups objected the decision by Judge Kevin Carey and filed appeals to stop Tribune’s exit from Chapter 11 bankruptcy until a higher court can oversee the situation. Among these groups are Aurelius Capital Management, but more interestingly, Samuel Zell, the very man who people blame Tribune’s problems for. Tribune complains that a delay to exit from Chapter 11 bankruptcy can cost anywhere between $1.5 billion and $3 billion. Staying in bankruptcy could disable potential broadcasting partnerships and other strategic opportunities, and Chief Executive Eddy Hartenstein says it will put Tribune at a competitive disadvantage, forcing them to play “catch-up” with other companies. Although Zell’s comments were not provided, challengers to the ruling such as Aurelius Capital Management said that a delay would not harm Tribune, stating that Tribune has instead benefited and seen its value increase since they have been in bankruptcy. Tribune’s attorneys attribute this trend to Tribune’s exemption to pay interest on its loans, allowing them to increase profits. [13]

August 25, 2012

 

Cablevision dropped several Tribune Broadcasting stations over its continued fight over retransmission fees. On August 17, 2012, Cablevision dropped Tribune’s CW affiliates in New York (WPIX-TV), Denver (KWGN-TV), and Waterbury, Connecticut (WCCT-TV), and its MyNetwork affiliate in Philadelphia (WPHL-TV). Cablevision added on to that list of valuable stations with new losses of Tribune’s FOX affiliate in Hartford (WTIC-TV) along with WGN America nationwide. Cablevision is one of the most popular television services in the New York metropolitan area and other Western states that reaches millions of customers. [14] Cablevision stated that Tribune removed these stations “even after Cablevision agreed to pay all the fees they demanded.” Tribune countered that by saying they “never made any threat to withdraw these stations or demand that Cablevision remove them.” [15] [16]

September 21, 2012

As a result of Judge Kevin Carey’s decision to release Tribune from Chapter 11 bankruptcy, the company has been looking to restructure. At the head of the list of CEO possibilities is Peter Liguori, as sources believe he is the “leading candidate.” Mr. Liguori has previously been President of Fox Broadcasting and Chief Operating Officer of Discovery Communications. Peter stepped down from his role as COO of Discovery Communications to become a strategic advisor for the telecommunications and media team of the private equity firm, Carlyle Group LP. If Liguori was to become the new CEO of Tribune, he would replace Eddy Hartenstein, who has been serving since May 2011. However, appointing a new CEO will prove to be a time consuming task. Tribune must first receive permission by the Federal Communications Commission to fully emerge from bankruptcy. Also, Tribune has to form a new board of directors and have that, too, approved by the FCC. Then, the company’s new projected owners, Oaktree Capital Group LLC, JP Morgan & Chase Co., and Angelo, Gordon & Co. have to approve Mr. Liguori as the new CEO. Before Peter Liguori, other powerful names such as Jeff Zucker and Michael Eisner had been rumored to be the leaders for the new CEO of Tribune. [17]

November 16, 2012

The Federal Communications Commission approved Judge Kevin Carey’s decision and granted waivers for Tribune Company to emerge from bankruptcy. Tribune and the FCC agreed on equal distribution of power within public airwaves between Tribune’s new primary owners, Oaktree Capital Group LLC, JP Morgan & Chase Co., and Angelo, Gordon & Co. Tribune is expected to fully exit Chapter 11 bankruptcy within the next several weeks. [18]

Works Cited:

[1]: History page, Tribune  http://corporate.tribune.com/pressroom/?page_id=2313 Retrieved 6 December 2012

[2]: About page, Tribune http://corporate.tribune.com/pressroom/?page_id=2 Retrieved 6 December 2012

[3]: Major Media Companies – Tribune Company, Advertising Age http://adage.com/datacenter/mediatrees2012/#141 Retrieved 6 December 2012

[4]: Markets & Stations – Tribune Company, TV Basics http://www.tvb.org/markets_stations#!id=661&type=broadcast_group Retrieved 6 December 2012

[5]: 2012-2013 DMA Ranks, Neilsen http://www.nielsen.com/us/en/measurement/television-measurement.html Sept. 22, 2012. Retrieved 6 December 2012

[6]: WPIX New Yorkhttp://pix11.com/ Retrieved 6 December 2012

[7]: WGN Chicago http://www.wgntv.com/ Retrieved 6 December 2012

[8]: MyPHL17 Philadelphia http://www.myphl17.com/ Retrieved 6 December 2012

[9]: The CW33 Dallas – Ft. Worth http://nightcaptv.com/ Retrieved 6 December 2012

[10]: Summer/Fall 2012 Premiere Ratings, TV Basics  http://www.tvb.org/measurement/summer_primetime_broadcast Retrieved 6 December 2012

[11]: Samuel Zell, New York Times http://topics.nytimes.com/top/reference/timestopics/people/z/sam_zell/index.html Aug. 31, 2009. Retrieved 6 December 2012

[12]: “Bankruptcy Judge Endorses Tribune Co. Ch. 11 Plan,” Peg Brickley, Dow Jones http://bankruptcynews.dowjones.com/article?an=DJFDBR0020120723e87nmnkqo&r=wsjblog&ReturnUrl=http%3a%2f%2fbankruptcynews.dowjones.com%3a80%2farticle%3fan%3dDJFDBR0020120723e87nmnkqo%26r%3dwsjblog Jul. 23, 2012. Retrieved 6 December 2012

[13]: “Tribune Says Bankruptcy Appeal Could Cause $1.5 Billion Damage,” Peg Brickley, Dow Jones http://bankruptcynews.dowjones.com/article?an=%20DJFDBR0020120809e889lsurs%20&r=wsjblog&ReturnUrl=http%3a%2f%2fbankruptcynews.dowjones.com%3a80%2farticle%3fan%3d%2520DJFDBR0020120809e889lsurs%2520%26r%3dwsjblog Aug. 9, 2012. Retrieved 6 December 2012

[14]: About page, Cablevision http://www.cablevision.com/about/ Retrieved 6 December 2012

[15]: “Cablevision Loses Tribune’s WGN America, Hartford Fox Affiliate,” Todd Spangler, Multichannel News http://www.multichannel.com/cable-operators/cablevision-loses-tribunes-wgn-america-hartford-fox-affiliate/140004 Aug. 25, 2012. Retrieved 6 December 2012

[16]: “Cablevision Drops Tribune-Owned WPIX, KWGN, WCCT, WPHL in Yet Another Fee Dispute,” Phillip Dampier, Stop the Cap http://stopthecap.com/2012/08/21/cablevision-drops-tribune-owned-wpix-kwgn-wcct-wphl-in-yet-another-fee-dispute/Aug. 21, 2012. Retrieved 6 December 2012

[17]: “Tribune eyes former Discovery executive Liguori as CEO,” Ronald Grover and Peter Lauria  http://www.reuters.com/article/2012/09/21/us-tribune-liguori-idUSBRE88K16R20120921 Sept. 21, 2012. Retrieved 6 December 2012

[18]: “FCC grants Tribune Co. waivers, clears way to end bankruptcy,” Jim Puzzanghera, Los Angeles Times http://www.latimes.com/business/money/la-fi-mo-tribune-fcc-waivers-20121116,0,1824756.story Nov. 16, 2012. Retrieved 6 December 2012