Chandler Family Demands Tribune Spinoff

Jun 15, 2006  •  Post A Comment

In a sharply worded June 13 letter to its board of directors, Tribune Co.’s second-largest shareholder, the Chandler Family Trust, criticized the company’s current management and pushed for a split between Tribune’s print holdings and its TV station operation.

When Tribune bought the Chandlers’ Times Mirror Co. and their daily newspaper the Los Angeles Times in 2000, the strategy was to own print and broadcast properties in the three largest media markets “to produce above-industry performance for both its newspaper and broadcast assets,” the Chandler family wrote. But that strategy “failed,” the family said.

The letter also said that an expected regulatory change loosening cross-media ownership rules within the same market that was expected at the time the family sold Times-Mirror never materialized.

The letter criticized the company’s current management for attempting a $2 billion stock buyback, calling the move “a financial device that increases the company’s risk profile and undercuts the financial flexibility necessary to address the company’s fundamental challenges.”

Tribune owns 11 daily newspapers and 26 television stations, plus the cable station WGN, the Chicago Cubs baseball team and a radio station in Chicago.

In response to the letter, Tribune Director William A. Osborn said the recommendations made by the Chandler trusts “were considered by the board prior to the tender offer” and that all of the board members except the Chandlers approved the offer.