Former LATimes Owners go after Tribune Co.

[Balta1701]

Well, at least based on this report, there's a possibility that the greatest friend Cub Fans ever had will wind up being the former owners of the LA Times. The Chandler family, who's paper was bought a few years ago by the Tribune Company, own roughly 12% of that company. With a 40% drop in the stock price in the last few years, they're understandably unhappy, and they're going after Tribune Co. in response.

 

The former owners of the Los Angeles Times escalated their attack on the newspaper's parent company Wednesday, with a breakup or sale of Tribune Co. a possible outcome.

 

In a regulatory filing, representatives of the Chandler family, which holds more than 12% of Tribune, called for radical changes at the Chicago-based company after what they characterized as "disastrous" decisions and a nearly 40% decline in the stock price in the last two years.

 

In a blistering letter sent to Tribune directors that was included in the filing, the Chandlers demanded that the company spin off television assets, including its 26 stations, and consider selling some or all of its 11 newspapers.

 

The No. 3 newspaper chain by circulation, Tribune also owns the Chicago Tribune, Newsday and the Baltimore Sun as well as KTLA-TV Channel 5 and the Chicago Cubs baseball team.

 

In a direct challenge to the leadership of Tribune Chief Executive Dennis J. FitzSimons, the Chandlers threatened in the letter to push for new management using their power as the company's second-largest shareholder. The Chandlers sold The Times' former parent, Times Mirror Co., for $8 billion in 2000, becoming Tribune's No. 2 shareholder. Its biggest shareholder is the foundation set up decades ago by the late Tribune owner, Col. Robert R. McCormick, which owns a 13.6% stake.

 

One of the nation's legendary newspaper dynasties, the Chandlers also threatened to ally with outside investors if the company did not address their concerns. Since late last year, the family has fielded inquiries from interested private investment firms and wealthy individuals, but hasn't had any serious discussions, people with knowledge of the developments said.

 

"The Chandlers are stirring the pot up," said industry analyst Edward Atorino of Benchmark Co., who added that adopting the family's proposals would lead to higher stock values.

 

The letter gives the first public account of the Chandlers' motivation for voting against a Tribune plan, announced May 30, to take on more than $2 billion in new debt to buy back 25% of the company's stock. Championing a more dramatic solution, the Chandlers said Wednesday that they would not sell any shares to Tribune. The buyback is designed to give cash to shareholders and lift the stock price.

 

The shares have jumped since the disclosure last week that the Chandlers, who owned and ran The Times for more than a century, opposed the buyback. After the 11-page letter became public Wednesday, the shares rose 2.9% to $31.94. That is just below the $32.50 maximum price Tribune has offered to pay under the buyback, which expires June 26.

If they're successful, they could eventually force the Tribune Company to break up into multiple companies or sell off its assets to other private groups. Those assets would include a certain losing Chicago Baseball team, most likely.

[southsider2k5]

The worst possible thing that could happen to the Cubs for Sox fans would be to have them sold off. A new owner wouldn't be nearly as interested in the profit margin, and would invest into the team much more than the TribCo ever did.