Tribune Co. announced Wednesday that it will spin its newspaper unit into a separate company called Tribune Publishing Co., a move that allows the company to focus on its television properties.
“Each will be a stronger company when separated from the other,” CEO Peter Liguori tells employees in a memo that’s posted below. “A company that is growing and succeeding on its own merits has a surer, clearer path forward, built on the ability to invest in and shape its own future.”
Los Angeles Times reporter Walter Hamilton says Tribune’s newspapers “still could be sold at any time and the idea of the spinoff abandoned” and “among the key questions to be answered: How much debt would the new company carry? And how much capital would it get as a financial underpinning?”
Here is Liguori’s memo to employees:
From: Peter Liguori
Sent: Wednesday, July 10, 2013 6:58 AM
Subject: Important announcement on Tribune’s future
Today we are making another important announcement regarding the future of Tribune and I want you to hear about it from me first. During the next several months, we intend to pursue the separation of our broadcasting and publishing businesses into two distinct companies —
* Tribune Publishing, which will be the home of our publishing assets, including the Los Angeles Times, Chicago Tribune, Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press.
* Tribune Company, which will consist of our other principal businesses, including 42 local television stations (following the close of our acquisition of Local TV), WGN Radio, WGN America, Tribune Studios, Tribune Digital Ventures, Tribune Media Services, our equity interests in Classified Ventures, CareerBuilder, and the TV Food Network, and our valuable portfolio of real estate assets./CONTINUES
Along with last week’s news regarding our proposed acquisition of Local TV, this decision will help shape our collective future as a dynamic media organization that maximizes shareholder value and positions itself for long-term success. Moving to separate our publishing and broadcasting assets into two distinct companies will bring single-minded attention to the journalistic standards, advertising partnerships and digital prospects of our iconic newspapers, while also enabling us to take advantage of the operational and strategic opportunities created by the significant scale we are building in broadcasting.
As the attached press release highlights, the separation is designed to allow these two companies to have greater financial and operational focus, the ability to tailor their capital structures to specific business needs, and a management team dedicated to strategic growth opportunities with maximum flexibility—in short, each will be a stronger company when separated from the other.
For employees, stronger businesses mean more and better opportunities and the chance to have a more direct impact on the company’s performance. A company that is growing and succeeding on its own merits has a surer, clearer path forward, built on the ability to invest in and shape its own future.
Finally, pursuing the separation of our publishing and broadcasting businesses will also allow us to maintain flexibility as we continue considering all our strategic alternatives for maximizing shareholder value.
It is fitting that we are making this announcement just a week after announcing our intent to acquire Local TV. Throughout its history, Tribune has succeeded by being innovative and moving decisively—it’s part of this company’s DNA.
Today’s announcement is another important step in our evolution as a world-class media company; it’s a step we can take because our publishing and broadcasting businesses are financially and operationally strong. Your talent and dedication made them what they are and will enable them to thrive for years to come.