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Martin’s Proposal May Force Tribune to Sell Off Hartford Property

Nov 13, 2007  •  Post A Comment

Federal Communications Commission Chairman Kevin J. Martin hung out a “for sale” sign for the Tribune Co. in announcing his media ownership proposal. The good news for Tribune is that the sign probably goes up only in Hartford, Conn., where two TV stations or, more likely, the Hartford Courant newspaper would have to be sold.
In announcing a proposal for a limited easing of newspaper-broadcast cross-ownership and in a press conference today talking about it, the FCC chairman effectively put the agency on schedule to complete not only action on media ownership but a review of Tribune Co.’s $8.2 billion buyout by investor Sam Zell and an employee stock ownership plan by year end.
“It clears the brush for Tribune to go through,” said Blair Levin, a former FCC official who is now an analyst for Stifel, Nicolaus & Co.
The Tribune buyout has already won Justice Department approval, but ran into problems with the FCC cross-ownership rule that Mr. Martin now wants to alter.
Under the current rule, Tribune’s sale and ownership of stations and newspapers in Los Angeles, New York, South Florida, Hartford and Chicago prevents the acquirer from owning TV stations in those same markets. Tribune’s ownership of the Chicago Tribune, WGN-TV and WGN-AM happened before the cross-ownership rule took effect and was grandfathered in.
Consumer groups and a church group have argued to the FCC that some of the stations are in clear violation of the rule and filed a lawsuit challenging the FCC’s continuation of the licenses.
Mr. Martin’s changes today would seem to provide a path to resolve some of the issues in cities in the top 20 markets.
In Los Angeles, ownership of the Los Angeles Times and KTLA-TV would be possible. In New York, ownership of Newsday and WPIX-TV would be possible. In South Florida, ownership of the Sun-Sentinel in Fort Lauderdale and WSFL-TV in Miami would be possible.
That leaves Chicago and Hartford.
Under the new rule, Tribune could own a single broadcast property in Chicago, but not two. The rule announced today by Mr. Martin allows some waivers to be granted. Mr. Martin told reporters today he would look favorably upon requests coming from properties that had been grandfathered in for more than 25 years.
“I would be sympathetic to original grandfathers put in place in 1975,” he said.
So that leaves Hartford, which isn’t one of the country’s top 20 cities and where Tribune has the Courant as well as two TV stations, WTIC-TV and WTXX-TV.
Mr. Martin left little doubt about his opinion of what happens there.
“I anticipate that [the rule’s] application to Hartford would require them to divest,” he said.
A Tribune Co. official declined comment, but the company and newspaper publishers may yet move to loosen the proposal or challenge the constitutionality of any cross-ownership limit in court.

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