Recent News

March 19, 2007

The regional director of the NLRB, released her decision regarding the company's objections and ruled in our favor. All the objections were dismissed. And the objections were found to be baseless.

 

Our Negotiation Team have been selected:

In Los Angeles:

1st shift, Keith Denson, 2nd shift, Lance Farrar, and 3rd shift, David Rascon.

Alternate: Mike Bassett

In Orange County:

1st shift, Chuck Reney, 2nd shift, Charles Laird, and 3rd shift, Ronnie Pineda.

Alternate: Kerry McClusky

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06/07/2007

Chandler stock sale ends ties with Times

06/06/2007

Burkle backs Dow Jones union; Buffett aid sought

Dozens of 'Star Tribune' Staffers Take Buyout

FitzSimons, other Trib execs sell shares in first tender

TRIBUNE CO. CUTS 45 BALTIMORE SUN EMPLOYEES FROM ITS PAYROLL, 16 FROM THE NEWSROOM

List of Star Tribune departures

05/31/2007

Bronstein Laments Staff Cuts -- As Departing M.E. Rosenthal Says "Industry Is In Retreat"

Unions reach three-year deal with Detroit newspapers

What is realry behind the failed sale of The Stanford Advocate and Greenwich Time?

TRIBUNE COMPANY PRESS RELEASE
May 31, 2007

Tribune Announces Final Results of Tender Offer

CHICAGO, May 31, 2007 –- Tribune Company (NYSE: TRB) today announced
the final results of its tender offer which expired at 5:00 p.m., New
York time, on Thursday, May 24, 2007. Tribune has accepted for
payment 126,000,000 of the 218,132,108 shares tendered in the tender
offer, at a price of $34.00 per share. The shares tendered represent
approximately 90 percent of shares outstanding, and the shares that
Tribune will repurchase represent approximately 52 percent of shares
outstanding. Following the repurchase, Tribune will have
approximately 117,000,000 shares of common stock outstanding.

Because more than 126,000,000 shares were tendered in the tender
offer, proration of tendered shares, except for “odd lots” (lots held
by owners of less than 100 shares), was required. Based on the number
of shares tendered, the company will apply a proration factor of
0.5771140650. The proration factor is based on the ratio of
126,000,000 shares (the total number of shares to be repurchased) to
the total number of shares properly tendered and not properly
withdrawn by all shareholders, other than “odd lot” holders.

The company will commence payment for shares purchased in the tender
offer promptly and in any event no later than June 5, 2007. Payment
for shares purchased will be made in cash, without interest. The
company will promptly return shares that it does not purchase to the
tendering stockholders at the company’s expense.

“We are pleased with the results of the tender offer and its
successful conclusion,” said Dennis FitzSimons, Tribune chairman,
president and chief executive officer. “The first stage of our
transaction that will result in Tribune Company going private is now
complete. We look forward to obtaining the necessary approvals for the
next stage of the transaction and to completing the transition to a
private company.”

Merrill Lynch & Co., Citigroup Global Markets Inc., J.P. Morgan
Securities Inc. and Banc of America Securities LLC served as Co-Dealer
Managers for the tender offer. Innisfree M&A Incorporated served as
Information Agent and Computershare Trust Company, N.A. served as the
Depositary. Any questions about the tender offer may be directed to
Innisfree M&A at 501 Madison Avenue, New York, NY 10022, telephone
(877) 825-8621 (banker and brokerage firms call collect (212)
750-5833).

05/26/2007

Tribune debt may force asset sales

California Split: 57 More Job Cuts at 'L.A. Times'

McCormick Tribune foundation to tender all Tribune shares

TRIBUNE COMPANY PRESS RELEASE
May 25, 2007

Tribune and Gannett Terminate Agreement to Sell Southern Connecticut
Newspapers

CHICAGO, May 25, 2007 –- Tribune Company (NYSE:TRB) and Gannett Co.,
Inc. (NYSE: GCI) today announced the termination of the agreement
under which Gannett was to purchase Southern Connecticut Newspapers,
The Advocate (Stamford) and Greenwich Time.

The agreement was terminated following an arbitrator’s ruling last
month that Tribune could not sell the company unless the buyer assumed
the existing UAW contract as a condition of the sale, which Gannett
declined to do. The contract covered certain editorial employees at
The Advocate.

Tribune also announced that it would immediately begin the process of
soliciting offers for the newspapers with the intention of completing
a sale as soon as possible.

 

05/25/2007

Tribune Announces Preliminary Results of Tender Offer

O'Shea's buyout message (57 editorial staffers will be leaving...)from LAObserved

Hartford Courant' Offers Newsroom Buyouts

05/23/2007

Illinois Congressmen Ask FCC to Grant Tribune Co. Cross-Ownership Waivers

Gannett Plans to Sell Indiana Daily

 

05/22/2007

2 Tribune Co. papers mulling shortened stock lists: WSJ

Trib scrambles to stop presses

 

05/18/2007

Tribune Co. enters $8.03 billion credit pact

NYTimes.com, USAToday.com: Top Newspaper Web Sites in April

Sun-Times Media to terminate some publications

Baltimore Sun enters labor talks

05/14/2007

Tribune Co. April Ad Revenue Plunges 10.3%

Many Cuts and Crises at a Paper

Los Angeles Times seek labor relations manager

05/11/2007

View from the Top: Sam Zell on the media (Financial Times Interview May02)

Tribune CEO peppered with questions on Zell deal

Tribune Co. welcomes Zell to board; Chandlers exit

CEO cites 'new beginning' for Tribune

05/10/2007

Zell firm's point man is believer in paper profits

Tribune accepts that sale of Stamford paper violated union contract

Tribune Shareholders Meeting Today

05/03/2007

Tribune to seek FCC waivers to back private bid

05/02/2007

Dow Jones mulls Murdoch offer; family to reject

Murdoch calls a bottom on newspaper stocks

05/01/2007

Newspapers' circulation in U.S. drops nearly 1 million in past 12 months

Sun’s guild employees accept buyout

FAS-FAX Circ Numbers for the Top 25 Dailies and Sunday Papers

04/30/2007

Sun’s guild employees accept buyout

From The Los Angeles Times-latimes.com -Business Section-

Some Tribune leaders forgo bonuses linked to buyout
However, experts point to other rich incentives for executives to stay.
By Julie Johnsson and Michael Oneal, Chicago Tribune
April 30, 2007

Several top officers of Tribune Co. have joined Chief Executive Dennis J. FitzSimons in limiting or declining their slice of a "transaction bonus pool" related to the company's $8.2-billion bid to go private.

Tribune's board established the special incentive in September to prompt management to seek the best deal for shareholders even though such a transaction might cost them their jobs, according to an April 25 filing with the Securities and Exchange Commission.

FitzSimons opted out of the pool, which was set up to pay $6.5 million to 32 unnamed executives if the transaction closed as planned.

The Chicago company's latest filings show that Scott Smith, president of Tribune Publishing, has also forfeited his $400,000 bonus, while Donald Grenesko, senior vice president for finance and administration, and John Reardon, president of Tribune Broadcasting, will receive smaller bonuses than the company indicated in an earlier filing.

Grenesko will receive $400,000 instead of $600,000; Reardon will get $200,000 instead of $350,000.

The pullbacks reduced the total payout to $5.2 million, although the pool had been expanded to include 39 executives.

Smith said Friday that he didn't know he had been included in the bonus pool initially. When he learned that FitzSimons had opted out, Smith said he believed it was appropriate for him to decline the payout too.

With Tribune going through a difficult period and "making tough decisions about staffing," Smith said, it would be better for him to "focus on what was best for the company."

Tribune newspapers, including the Los Angeles Times, recently announced a total of about 300 job reductions, and the company's corporate office last week laid off 11 people. Against that backdrop, the bonus pool had created high resentment among Tribune's rank and file.

Smith insisted, however, that the bonus pool was an appropriate reward for the rest of Tribune's management team, given the premium they created for shareholders by signing a deal with billionaire Sam Zell that prices the stock at $34. "There were others who worked exceptionally hard and who are very deserving," Smith said.

Even so, some compensation experts have questioned why Tribune believed that it needed the pool to reward senior executives and entice them to stay when there were plenty of other incentives in place.

Mark Reilly, a partner with Compensation Consulting Consortium in Chicago, pointed out that Tribune's management team would also receive "share equivalents" equal to an 8% stake in the new company as part of an incentive plan to encourage strong performance.

That stake could grow to be worth hundreds of millions of dollars over time if Tribune can pay down the $13 billion in debt it will have after the deal.

"Why pay a bonus to make them stay until the merger closes? There's a pretty big incentive for them because they'll participate in this huge stock plan," Reilly said.

Additionally, documents show that when the transaction closes, FitzSimons, Smith and Tribune's three other highest-paid executives will cash about $65 million worth of stock, options and restricted shares they have accumulated over their long careers with the company.

The documents filed last week also provide new information about the payouts the top five executives will get if they leave the company.

The officers would be eligible for a total of $26.4 million in severance, the filings show. FitzSimons and Grenesko qualify for the payouts if they leave voluntarily within 13 months of the deal's closing.

The other executives — Smith, Reardon and Luis Lewin, senior vice president of human resources — would be eligible for similar benefits, but only if they were let go or their positions in the company were diminished.

Tribune would also pick up a tax bill totaling $10 million that would be generated by those payments.

The tax "gross-up" numbers mean FitzSimons could choose to walk away from the company with $44.2 million. That includes severance of $10.6 million, options and restricted stock worth $6.9 million and $3.8 million to cover his taxes. He also will sell shares worth $22.9 million if the transaction is completed.

Grenesko could choose to leave with $20.1 million, including his $10.6 million in stock holdings. Smith could depart with $19.1 million, Reardon $11.8 million and Lewin $6.7 million if they are asked to leave.

The payments are large, compensation experts say, but they note that much of the total would come from sales of stock.

jjohnsson@tribune.com

mdoneal@tribune.com

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04/27/2007

- Tribune offers big payday or mayday

04/26/2007

- Newspapers Debate Online Reader Comments

- Tribune launches $4.3-billion tender offer
The L.A. Times' parent aims to repurchase 126 million shares as part of a takeover deal.
By Thomas S. Mulligan, Times Staff Writer
April 26, 2007

Tribune Co., Chicago-based parent of The Times, Wednesday launched its expected $4.3-billion tender offer for more than half of its shares. The offer is the first of a two-step leveraged buyout by Chicago billionaire Sam Zell and a new employee stock ownership plan.

The tender offer is aimed at repurchasing as many as 126 million shares of Tribune stock at $34 apiece in cash, financed by bank loans and a $250-million investment from Zell that was completed Monday, the company said in a statement. The tender offer is to expire May 24, although it could be extended.

"This tender offer will return significant capital to Tribune shareholders, including employees who currently own about 23 million shares of stock," Dennis J. FitzSimons, Tribune chairman and chief executive, said in the statement.

Besides The Times, Tribune owns KTLA-TV Channel 5, the Chicago Tribune, the Chicago Cubs baseball team and other newspapers and TV stations. It has announced plans to sell the Cubs after the baseball season.

California's Chandler family, Tribune's largest shareholder with about 20% of the stock, has agreed to tender all its shares in the offer. When the Chandlers in June publicly criticized Tribune management and called for a sale or breakup of the company, they started the process that led to the buyout agreement signed April 1 and announced the next day.

The company said that if more than 126 million shares were tendered, it would purchase tendered shares on a pro-rata basis, except for "odd lots" of fewer than 100 shares, which would not be prorated. The 126 million shares represent about 52% of Tribune shares outstanding. If fewer than 126 million shares are tendered, the company said, it would repurchase them all, paying $34 in cash without interest "promptly after the expiration of the offer period."

Neither Zell nor the new ESOP will tender any shares in the offering.

The tender offer is not contingent upon any minimum number of shares being tendered, Tribune said, but it is subject to obtaining financing and receiving a solvency opinion from "a nationally recognized valuation firm."

Tribune said in a regulatory filing Tuesday that Zell had purchased 1.47 million shares for $50 million in cash Monday and had paid an additional $200 million for a note that is convertible into 5.88 million shares.

Having completed his initial investment, Zell will join the Tribune board no later than May 9, the date of the company's annual meeting.

The ESOP also has made its initial investment, buying 8.93 million shares at $28 a share, financing it with a $250-million, 30-year promissory note from the company.

When the second stage of the transaction is completed in the fourth quarter, the remaining shares will be bought back with borrowed money. At that point, Zell will control about 40% of the company; the ESOP and Tribune management will control the remainder. Zell will be named chairman when the transaction is completed.

Depending on whether the tender offer is oversubscribed, the Chandlers may not sell all of their shares because they are subject to the same pro-rata terms as other shareholders, Tribune spokesman Gary Weitman said Wednesday. But even if the Chandlers sold only a pro rata 52% of their shares, it would bring their stake below 15%, triggering the loss of the family's three seats on the board.

In a regulatory filing Wednesday, Tribune disclosed details of the conflict with the Chandlers and fleshed out the steps leading to its decision to strike a deal with Zell.

In February 2006, according to the filing, the Chandlers were pushing Tribune for a tax-saving restructuring of two family partnerships that the company had inherited in its 2000 acquisition of the Chandler-controlled Times Mirror Co., The Times' former corporate parent. The Chandlers threatened that if they weren't satisfied with Tribune's progress, they would recruit other shareholders or outsiders to try to take over the company.

The filing also disclosed that Zell on Nov. 8 signed a confidentiality agreement allowing him to review Tribune financial documents. That was three months before his name surfaced publicly as a potential bidder.

thomas.mulligan@latimes.com

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- More bad print numbers From LAOberseved

The Wall Street Journal and USA Today will report slight bumps up in circulation next week, but the Orange County Register will be down more than 5%, Editor & Publisher says. The San Diego Union-Tribune and San Jose Mercury News will also report big drops in the new round of circulation numbers, and the New York Times is preparing analysts for "circulation declines at our properties, slight declines to mid-single digits," E&P reports. No word yet on the LAT, though publisher David Hiller claimed chirpily this week that more eyeballs than ever are reading his paper's content. Now if he can just figure out a way to make money off that, since fewer people are paying for his content since, oh, about the 1970s.

04/25/2007

Los Angeles Times and The Newspaper Guild FAQ

Tribune proceeds with buyback, deal

04/23/2007

- Here's the LAT buyout deal... from LAObserved.com

- Times editor Jim O'Shea's Memo to Staff... from LAObserved.com

Tribune will accept 150 LAT volunteers (to go) ..from Tribune Employees Talk

 

Los Angeles Times publisher David Hiller announced the deal in a lengthy memo to all employees – though the deal itself is not available to all. Editor O'Shea followed up with a memo in which he said he had "worked extremely hard to minimize any staff reduction." Read them here and here on LAObserved.com.

The Employee Voluntary Separation Plan (EVSP) includes:
-- one week's pay for every 6 months of service paid thru salary continuation;
-- benefits continued for eligible employees for length of separation pay;
-- employer 401(k) allocation that will continue for eligible employees;
-- outplacement assistance

The company needs to eliminate positions and not fill others, so if it doesn't get the numbers through the voluntary separation offer, folks will have to go involuntarily.

So should you roll the dice? According to the plan, if your position is eliminated you get the same buyout as if you participated in the EVSP. If you are "encouraged" to take the EVSP but don't, what's the chance you are taking?

What's the plan in Chicago?

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04/21/2007

Ax to Fall at 'Chicago Tribune'?

Times is expected to cut 5% of staff -from LA Times print edition-

L.A.Times to lose 150 jobs next week

Tribune to Eliminate Jobs, Managers on a 8 step program

04/20/2007

N.Y. Times, Gannett, Tribune report lower profit

04/19/2007

Tribune Reports 2007 First Quarter Results

Tables attached to this release

04/17/2007

Los Angeles Times Wins Pulitzer Prize for 'Altered Oceans' Series

04/15/2007

Los Angeles Times Announces New Executive Appointments

Sam Zell's filing to the SEC on Tribune sale

McClatchy seen joining Yahoo ad deal

Times won't change structure

*

Fitch Downgrades Tribune's IDR to 'BB-'; Watch Negative

The ESOP Association President Comments on Sale of Tribune Company to an ESOP

Tribune has huge opportunity as private entity

Tribune's Intensifying Groan

Arbitrator rules against Tribune in Gannett deal

Zell says he plans to keep L.A. Times

Zell's plans for Tribune Co. taking shape

Tribune to Sell Chicago Cubs Following 2007 Baseball Season

Los Angeles Billionaires Increase Bid for Tribune

Tribune CEO FitzSimons Gets $6.2M in '06

*

An ESOP for the Tribune Company? Things to Know in Assessing the Transaction
By Corey Rosen, NCEO Executive Director
Last Updated on April 3, 2007

This article is being updated as new information becomes available.
(By Corey Rosen)

The proposal by Sam Zell to use an ESOP to purchase the Tribune Company has now been accepted (see the Tribune's press release). The deal must still pass a variety of regulatory approvals, however, including a determination by the independent trustee of the ESOP (GreatBanc Trust) that the transaction structure and the price paid for the shares are fair to ESOP participants.

The proposed transaction is complicated. It appears, however, that when all the dust settles, the ESOP will end up with at least majority ownership of the company, but Sam Zell will have stock warrants that can be exchanged for up to 40% of the shares. These warrants might be purchased by the ESOP, sold to other investors, or sold in a public offering or sale of the company.

The ESOP will be governed by an independent trustee who, under the law, must make decisions for "the exclusive benefit of plan participants." This is defined to mean that the trustee should seek to maximize the long-term value of plan assets; it does not mean the trustee should become the advocate for employees on issues such as pay, layoffs, or other work-related issues.
Transaction Structure

Initially, Sam Zell will invest $250 million in cash to purchase newly issued Tribune shares at $34 per share. One month later, the ESOP will borrow money to buy $250 million worth of newly issued shares at $28 per share (the ESOP was able to negotiate for a lower price). The company will then borrow enough money to do a self-tender offer at $34 per share to buy half the outstanding shares, including those currently held by an existing ESOP at the Tribune. If the company obtains all the needed regulatory approvals, a process that will take many months, debt will be used to take the company private at $34 per share. Zell's $250 million in stock will be bought with additional debt, but Zell will put in an additional $65 million in cash to purchase warrants worth up to 40% of the company. The result will be a 100% S corporation ESOP, but with Zell having a potential claim on up to 40% of the corporate value. No equity will come from existing employee plans or contributions. If the deal does not go through, shareholders will be guaranteed the $34 per share plus 8% annual growth, compounded daily, in any final transaction.
How ESOPs Work

More details on how ESOPs work can be found elsewhere on our site. Basically, an ESOP is a kind of employee benefit plan, similar in some ways to a profit-sharing plan. With an ESOP, a company sets up a trust fund. The company can contribute to the ESOP trust new shares of its own stock or cash to buy existing shares; alternatively, the ESOP can borrow money to buy new or existing shares, with the company making cash contributions to the plan to enable it to repay the loan. In the Tribune case, the ESOP will borrow money from the company. Regardless of how the plan acquires stock, company contributions to the trust are tax-deductible, within certain limits. So in this case, the company is able to use the ESOP to borrow money and repay it in pretax dollars, deducting both principal and interest. This is one of the key tax benefits that the many articles on this transaction are referencing.

Shares in the trust are allocated to individual employee accounts. Although there are some exceptions, generally all full-time employees over 21 participate in the plan. Allocations are made either on the basis of relative pay or some more equal formula. As employees accumulate seniority with the company, they acquire an increasing right to the shares in their account, a process known as vesting. Employees must be 100% vested within three to six years, depending on whether vesting is all at once (cliff vesting) or gradual.

When employees leave the company, they receive their stock, which the company must buy back from them at its fair market value (unless there is a public market for the shares). Private companies must have an annual outside valuation to determine the price of their shares. In private companies, employees must be able to vote their allocated shares on major issues, such as closing or relocating, but the company can choose whether to pass through voting rights (such as for the board of directors) on other issues. In public companies, employees must be able to vote all issues.

When the Tribune Company converts to S corporation status, another tax benefit will kick in. Unlike C corporations, S corporations do not pay income tax directly. Instead, S corporation owners are taxed at their personal tax rates on their pro-rata share of company profits. Thus, a 30% owner must pay tax on 30% of the profits. S corporations typically issue a distribution to their owners to enable them to pay the tax. ESOPs, and only ESOPs among S corporation owners, do not have to pay any taxes on their share of the profits, at least for federal purposes (some states have different tax regimes for S corporations). If the ESOP is one of several owners, then it must receive its pro-rata share of distributions made to other owners for tax purposes, even if it does not pay taxes. The distributions are added to employee accounts. If the ESOP owns 100% of the company, there is no federal income tax. The theory here is that it would be unfair to tax the ESOP on its share of the earnings because the employees will be taxed on the eventual distributions they receive from the ESOP (just as they would in any benefit plan). S corporations are limited to 100 shareholders, but the ESOP is legally considered only one owner (the ESOP trust).
Financial Issues for Employees

The current retirement plans will be changed somewhat. For most employees, the current plan involves a company contribution to the 401(k) plan that can be as much as 4% of pay if an employee defers at least 4% of his or her own pay into the plan, plus an additional variable contribution of up to 5% of pay depending on profits. While this is the most common arrangement, however, different properties owned by the Tribune Company can have different arrangements. With the ESOP, the company will contribute 5% of pay to the ESOP, to be held in Tribune stock, plus 3% per year to a cash balance retirement plan, a kind of hybrid pension/defined contribution plan. In a cash balance plan, an employee has an account that receives contributions each year, plus a credited rate of interest set by the company in accordance with federal guidelines. The employee is guaranteed to receive whatever is in the account at retirement, either in the form of a lump-sum distribution or an annuity, even if the value of the company's investments made to fund the plan declines. Insurance for this is provided by the Pension Benefit Guaranty Corporation. So employees will generally receive more from the company overall, but they will be somewhat less diversified.

The deal will involve a great deal of debt, and one question is whether this will mean future layoffs, asset sales, cuts in compensation, or changes in business strategy that might compromise the editorial integrity of the papers. It should be noted, of course, that any proposed transaction for the Tribune, with or without an ESOP, would likely involve as much or more debt, and that many of these transactions end up with assets being sold, employees being laid off, and/or compensation being reduced.
Governance Issues

Employees in an ESOP are not required to be allowed to vote for the board of directors, although the company could provide that. The ESOP's trustee will be the legal shareholder. In deals of this size, the trustee is usually an outside institution acting independently, although the company could name one or more insiders as trustees instead. Trustees of the ESOP must make their decisions with "with an eye single" to maximizing the value of plan assets over the long term. Their most critical assignment is to assure that the ESOP pays a fair price for the stock. To do that, they will hire outside appraisal experts both to opine on whether the stock price is too high and whether the percentage of ownership the ESOP is getting in return for what it is paying is fair relative to what other investors are getting for what they pay. In doing that, they must assess what an outside buyer would be willing to pay for the shares on a financial basis, assuming no synergies between the Tribune Company and the buyer, such as might exist if another media company bought it (synergistic buyers often will pay more than financial buyers).
Will the ESOP Help the Tribune Succeed?

Clearly, the ESOP brings a potential tax advantage to the company, but that advantage is of no value unless the company makes a profit. The considerable debt the company will assume may limit the value of these deductions, at least for the immediate future, unless strong profits are forthcoming.

A more important issue is what kind of corporate culture is created. Two decades of research on employee ownership and corporate performance have produced a remarkably consistent and robust result. ESOP companies grow about 2% to 3% per year faster in sales, employment, and productivity than they would be expected to grow absent an ESOP (the studies look at how ESOP companies performed relative to comparable non-ESOP companies before they had an ESOP and then again after, subtracting the difference to index out industry effects; the 2% to 3% differential reflects this pre-ESOP to post-ESOP change net of industry effects). That difference, however, is accounted for entirely by the companies that combine the ESOP with a high-involvement, open-book management approach. These companies get employees very involved in work teams, cross-functional groups, and other employee involvement structures. They share lots of information at all levels about all levels of corporate performance. They devolve as much day-to-day decision making as possible to employees, individually and in teams. These companies grow 6% to 11% per year faster post-ESOP than would be expected, while companies with top-down management approaches actually do worse post-ESOP. They have raised expectations, and then failed to meet them. High-involvement management on its own, by the way, does not have a sustained impact; it is the combination of ownership and participation that works.

United Airlines, a famously failed ESOP, is a disturbing example of a company that did not follow this "ownership culture" model, leading to a dysfunctional culture. By contrast, Southwest Airlines, which has a profit-sharing plan that functions much like an ESOP, very much does follow the model, much to the delight of customers and shareholders. Unfortunately, many in the financial world see these culture issues as "soft" and not really essential to the deal. In fact, they are at the essence of the deal, as any experienced ESOP executive will quickly note.

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Geffen reportedly in talks to acquire L.A. Times
By David B. Wilkerson, MarketWatch
Last Update: 2:05 PM ET Apr 5, 2007

CHICAGO (MarketWatch) -- Entertainment mogul David Geffen is in talks to buy the Los Angeles Times from Tribune Co., according to a published report, days after the company agreed to a sale to real-estate titan Sam Zell.

Geffen, who had previously bid $2 billion for the Times, is talking to Zell about acquiring the troubled newspaper, the Washington Post reported Thursday.

The Post also said that billionaire investors Ron Burkle and Eli Broad, who entered a late bid for Tribune Co (TRB) last week before the company accepted Zell's offer, remain interested in Tribune. A clause in Zell's agreement with Tribune lets the company solicit higher bids until shareholders have a chance to vote on Zell's bid later this year.

Tribune's acceptance of Zell's $8 billion offer to take the company private in a complex transaction ended a months-long auction process, one spurred by Tribune's largest shareholder, the Chandler Trusts. See full story.

Tribune owns 11 newspapers, including the Chicago Tribune, the Los Angeles Times and Newsday, as well as 23 television stations, most of which are affiliated with the new CW Network (formed when the WB and UPN networks were shut down prior to the current television season).

Tribune shares were unchanged at $32.76 on Thursday.

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The ESOP Association President Comments on Sale of Tribune Company to an ESOP

WASHINGTON, April 2, 2007 /PRNewswire via COMTEX/ -- The following is a statement from J. Michael Keeling, President of The ESOP Association, in reaction to the sale of the Tribune Company to an ESOP (employee stock ownership plan).

The ESOP Association is pleased to see news today of the sale of the Tribune Company to an ESOP. There are very few companies in ESOP history the size of the Tribune Company using a leveraged ESOP. It is refreshing to see a private equity/LBO transaction take place that includes the employees.

The deal put together by Mr. Zell will permit employees to share in the wealth of the company. We urge the company's leadership to be aware of the challenges of being an ESOP company and to pay attention to the education of the employees so they are conscious of the needs of being an ESOP company and will be able to make the company succeed beyond anyone's expectations.

Dr. Steven Freeman, a scholar at the University of Pennsylvania, recently released a study covering over 30 years of research on ESOPs and employee ownership and the positive impact that can be brought to a company by an ESOP. It offers fresh opinions on employee ownership and ESOPs and is important research on the topic. The study can be found on The ESOP Association's website at http://www.esopassociation.org.

Founded in 1978, The ESOP Association represents over 1,400 ESOP companies and over 1 million employee owners who believe that employee ownership will improve American competitiveness, increase productivity through greater employee participation and strengthen our free enterprise economy.

SOURCE The ESOP Association

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Article from South Florida Business Journal

The Tribune Co. announced Monday morning it has agreed to an $8.2 billion package proposed by Chicago real estate magnate Sam Zell to acquire the company and take it private.

Zell's bid, which will infuse $315 million into the business, topped an 11th-hour offer from California billionaires Ron Burkle and Eli Broad.

Chicago-based Tribune Co. (NYSE: TRB) said the deal will involve an employee stock ownership plan. Zell will join the Tribune board upon completion of his initial investment and will become chairman when the merger closes.

The Tribune board of directors, after a recommendation of a committee consisting of independent directors, has approved the agreements and will recommend shareholder approval. Representatives of the Chandler Trusts, the company's largest shareholder, abstained from voting as directors. However, the Chandler Trusts have agreed to vote in favor of the transaction.

Tribune, parent company of the South Florida Sun-Sentinel and South Florida's CW affiliate, WSFL Channel 39, announced separately Monday that it plans to sell the Chicago Cubs Major League Baseball team after the 2007 baseball season and to sell its 25 percent interest in Comcast SportsNet Chicago.

Tribune is the nation's second-largest newspaper company, as measured by circulation, and is also one of the largest owners of TV stations. Its newspapers also include the Los Angeles Times, Chicago Tribune and Newsday.

While daily newspaper companies are under pressure due to the proliferation of non-traditional media, Tribune has consistently posted profit of more than $500 million in each of the past three years. In the fourth quarter, it had profit of $239 million on revenue of $1.46 billion.

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Apr
4
2007
Zell, Put L.A. Back in 'Times'

I'm all for a little inside baseball, after all I like politics. But my local paper, the Los Angeles Times, is reading more like an internal company newsletter these days than a big city daily. There's new management in town, you see, and the wolf-crying reporters and editors are covering their change of fate as if the future of the nation's second-largest metropolis is at stake.

Here's a memo to the editors: We, the people of Southern California, do not care who owns the LA Times.

It seems the newsmen in Los Angeles were shocked by the reaction of this week's sale of the Tribune Company, which owns the Times. With bated breath, they report, "as the sun warmed the city Monday and people here joined the morning rush-hour crush on Chicago's elevated train, the chatter revolved around one thing: Tribune's plans to sell the beloved - and legendarily cursed - Cubs after this baseball season."

Apparently, the good people of Chicago just don't care who owns their local paper, the Chicago Tribune. In Los Angeles, on the other hand, the sale of the media company to real estate magnate Sam Zell has merited 23 articles here in L.A. on the subject in just three days!

But, hey, guess what, here in Los Angeles…we are as nonplussed as the Chicagoans. And it's not just because we don't have the Cubbies and the First Church of Baseball (aka Wrigley Field) to worry about. To get clued to this reality, the folks in the Times newsroom ought to have a look at their own paper. This morning's edition has a story about the NBC sitcom 30 Rock. Although the show is critically acclaimed, nobody is watching it - and it's struggling to stay on the air. This is an allegory. As Mickey Kaus likes to point out, people don't buy the newspaper for it's journalistic standards. They buy it because there is something compelling to read.

The Times is no longer compelling in a host of other ways. And, as with other complaints about newspapers, this is a situation that's affected our political discourse here in Los Angeles. We'd rather hear about why our own United States Senator Diane Feinstein was forced to step down from a Committee appointment after it was revealed she was overseeing contracts awarded to companies owned by her husband. That's not quite the "starring role" the Times must have imagined in its last article mentioning the couple. It's no better with the paper's columnists. If I want to know what George Skelton is going to say, I can subscribe to Steve Maviglio's press releases and get the anti-Schwarzenegger spin of the day directly to my email box. If I want to know what T.J. Simers has to say in the sport section, I just have to fill in the latest anti-Phil Jackson or Pete Carroll screeds. Even the sports section shares the same contempt for success as the newsroom.

On the opinion pages, the situation is improving but still critical. I say it's improving because they have a former Reason editor and a month ago, they published a submission of mine. However, flanking my 800 words were an article by the former president of Harvard University and another by a professor from…Harvard University. It's not as if there aren't any academic institutions between Spring Street and the Charles River.

When the Times does bring in local voices, it is the same tired crowd we've been reading since at least the 1990's. The paper can create a new political culture in the city by giving a voice to a new generation of chatterati - after all, that's what's happened on the web, no? - but it requires the effort to look beyond the stable of writers and activists on whom they have relied for decades.

The next step of course, would be to bring back the "Metro" section and assign their best reporters to covering what is happening in the city - beyond the corridors of City Hall and the County Building. There have been countless stories about homelessness downtown, but it seems Steve Lopez and others on the truly local news beat haven't taken the effort to walk too far beyond Skid Row, which conveniently abuts their office building, to see that the homeless are now making encampments along the Sunset Strip and across the region.

I could go on. And, like many out here working on the web I could go on and on about the failings of the news business. But the problem is one that, ironically, has been spelled out very clearly by the Times' new owner: To be appealing to readers, the paper - on- or off-line needs to be relevant to those readers.

The people of Los Angeles don't much care who owns their local paper - they care whether the paper is readable and relevant to their lives. The Times, if it to succeed under new ownership, needs to put the L.A. back in the L.A. Times.

Posted by Scott Olin Schmidt

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