Tribune Has Choices in Noncore Asset Sale

Jun 5, 2006  •  Post A Comment

Tribune’s decision to consider selling noncore television stations to help finance a massive stock buy-back program has triggered speculation in some broadcasting circles about which properties the company might try to unload.

With 26 TV stations in its portfolio, sources say Tribune has a number of options, including three newly signed MyNetworkTV affiliates and one or both of its stations in New Orleans. The potential for a dust-up with Washington regulators over Tribune’s ownership of TV stations and a newspaper in Hartford, Conn., could also mean stations in either of those cities could be put up for sale. The company is expected to announce its plans in the coming weeks, with the sale process to be completed within the next year.

Tribune said last week it will look to raise up to $500 million from the sale of TV stations, real estate or nonstrategic investments to help finance a $2 billion stock buy-back plan involving 25 percent of Tribune’s outstanding shares. The move comes as Tribune looks to jumpstart its stock price after years of languishing shares.

Major Markets Off Limits

Tribune Chairman and CEO Dennis FitzSimons said the TV stations put on the block will likely be properties that “are not core to the program-buying strategy.” Off limits are properties in Tribune’s three largest markets: New York, Los Angeles and San Francisco.

A Tribune spokesman was not available for comment.

The company owns 16 stations that will become CW affiliates in September, six Fox affiliates, three stations that will become MyNetworkTV affiliates and one ABC affiliate.

Among the stations that might be ripe for sell-off: the soon-to-be MyNetworkTV stations, WATL-TV in Atlanta, WPHL-TV in Philadelphia and KTWB-TV in Seattle; CW stations in smaller markets such as Albany, N.Y., and Harrisburg, Pa.; and WGNO-TV, the ABC affiliate in Hurricane Katrina-ravaged New Orleans.

Tribune could consider selling Hartford station WTXX-TV, a station that has been at the center of a cross-ownership tussle between the company and the Federal Communications Commission. Current rules preclude a company from owning newspapers and TV stations in the same market, but Tribune presently has a waiver to own the station until 2007, when its broadcast license expires.