Tribune’s move confirms a trend as other large media companies are spinning off their high growing broadcast assets and keeping their publishing properties in a different unit. News Corp spun off its publishing arm in June. Belo spun off its broadcast and publishing units a few years ago and recently its Broadcast unit was sold to Gannett for about US $1.5 billion. After this transaction Gannett, traditionally a newspaper company, anticipates that broadcast will represent more than half of the company’s combined total EBITDA and together, Broadcast and Digital are expected to contribute nearly 2/3 of total EBITDA. Gannett has not communicated any intentions to split its broadcast and publishing units.
Tribune Co.’s plan to separate its broadcast and publishing divisions into two companies. The company in a statement said the Tribune Co. name would remain connected to its expanding broadcast business and Tribune Publishing Co. would become the new name of the company holding its newspaper assets, including the Chicago Tribune and Los Angeles Times, as well as Spanish-language newspapers Hoy (Los Angeles and Chicago) and El Sentinel in Fort Lauderdale, FL.
“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,” Peter Liguori, president and CEO of Tribune, said in a statement. “In addition, the separation is designed to allow each company to maximize its flexibility and competitiveness in a rapidly changing media environment.”
Tribune said each company will have its own board of directors and senior management team. According to Chicago Business “Splitting the two businesses will allow Tribune to separate the various tax, pension and other aspects associated with the two legacy businesses as well, perhaps allowing it to make the print business in some way more attractive to potential buyers and to make the broadcast business more successful in an eventual initial public offering of stock. That could make it easier for Tribune to handle an ongoing dispute with the Internal Revenue Service over hundreds of millions of dollars in taxes the agency says the company owes.”
The Trend of spinning off Broadcast from Publishing
Other large media companies are spinning off their broadcast assets and keeping their publishing properties in a different unit. News Corp spun off its publishing arm in June. Belo spun off its Broadcast and Publishing units a few years ago and last month its Broadcast unit was sold to Gannett for about $1.5 billion. Two weeks ago Tribune itself announced the acquisition of local TV, a deal that made it one of the largest TV station owners in the United States.