Tribune High on Broadcast Business

Apr 20, 2008  •  Post A Comment

Tribune Co. Chairman-CEO Sam Zell said the company’s broadcast business is exceeding his expectations, a bright spot for the debt-laden conglomerate whose print publishing unit is struggling.
Revenue trends at Tribune are “significantly worse” than expected and are forcing the debt-laden conglomerate to consider divestitures not originally envisioned, he said on a call last week with analysts.
Broadcasting year-to-date is running ahead of 2007, ahead of projections and ahead of “the industry average.” The company has had “no time yet to fully realize these gains,” however.
On the conference call, there was a good deal of focus on the print side of the Tribune empire and on changes being made in selling advertising throughout Tribune, according to Randy Michaels, executive VP and CEO of interactive and broadcasting.
But translating internal shifts at Tribune into traction with consumers and advertisers is an uphill battle in the current business environment, said Steve Ridge, the television president and corporate executive VP for consultancy Frank N. Magid Associates.
“There is no doubt that some markets are ripe for fresh ideas and dramatic new ways of doing business,” Mr. Ridge said. “Ultimately, consumers and advertisers will judge whether what shows up on all three screens is worthy of greater investment of their time and/or money.”
Mr. Michaels talked about bright signs on the Tribune TV front.
In San Diego, Tribune’s KSWB-TV is scheduled to become an affiliate of Fox Broadcasting, a move Mr. Michaels said could add $150 million to the intrinsic value of the station, currently a WB affiliate turned CW affiliate.
Indeed, he said, Tribune sees “tremendous upside” potential in all six of its current Fox-affiliated stations, most of which have been languishing as earners in what Mr. Michaels called the bottom 20%. (Tribune’s TV properties also include 30-year-old Superstation WGN-TV in Chicago, 14 CW affiliates, two MyNetworkTV affiliates and one ABC affiliate.)
The former Clear Channel executive talked of plans to add newscasts and morning shows that can boost revenue on Fox-affiliated stations.
“In the past we have been afraid to go after the No. 1 position that a Fox station with news can achieve,” Mr. Michaels said.
In South Florida, Tribune’s CW affiliate WSFL-TV is moving into the same building as the company’s Sun-Sentinel newspaper. The plan is to leverage the news off the paper’s Web site for a morning show.
According to Mr. Michaels, it will incorporate a “very high-tech but very slick look, not all that expensive, but repurposing the very expensive newsgathering that we already do for a completely different look and feel.”
In Seattle, he said, a lineup shuffle earlier this year already has paid off for KCPQ-TV. The Fox-affiliated station carries MyNetworkTV programming after Fox programming.
By pushing the MyNet lineup back an hour and putting news at 9 p.m., KCPQ has become “the first Fox station that Tribune has that has kind of broken out of the pack,” Mr. Michaels said. “We have stronger news, are winning in prime and … for the first time are No. 1 in billing in Seattle.”
Mr. Michaels said that hasn’t happened for any Tribune station since WGN-TV consolidated the superstation signals.
Out west, cameras have been added to the Sacramento bureau of the Tribune-owned Los Angeles Times to service sister stations KTLA-TV in Los Angeles, KTXL-TV in the California capital and KWSB in San Diego, Mr. Michaels said.
WGN is to be “relaunched” in May, said Mr. Michaels, who characterized the superstation as a huge opportunity for the company.
He bragged that a “completely inexpensive experiment” at the beginning of the baseball season involving the packaging of baseball-themed movies with game telecasts and a countdown clock has boosted viewership by 250%.
Mr. Zell, a real estate magnate, bought Tribune a year ago in a complex and heavily leveraged deal said to account for almost $8 billion of the multimedia company’s debt.
Since he took control of the company in December, Tribune has begun cutting jobs and other costs companywide. Mr. Zell wants to sell Chicago’s Wrigley Field to the state of Illinois before selling the Chicago Cubs baseball team. There also has been interest from News Corp. Chairman Rupert Murdoch and New York Daily News owner Mort Zuckerman in buying Newsday, one of the Tribune-owned newspapers.
Some recent headlines have focused on the specter of default because Tribune owes almost $1 billion in debt service alone this year, in addition to a $650 million balloon payment from the takeover financing that is due in December. An additional bill for $750 million will be due the middle of next year.
First-quarter 2008 results are not yet processed and more information is expected to be made available in late May with the filing of quarterly results with the Securities and Exchange Commission, Mr. Zell said.
Mr. Zell said periodic updates, such as the well-attended call with analysts Thursday afternoon, are planned.
“From where we sit now, it does not appear we will have difficulties meeting our commitments going forward,” Mr. Zell said. “Our challenge continues to be short-term issues, cash flow and, obviously, a tough environment in a weak economy. That has basically only made us all work significantly harder to achieve the objectives.”
During the three months he has run Tribune, he said, “There’s a great sense of ‘this company once was truly great, once was truly the leader in its industry,’ and everybody, including yours truly, and Randy and everybody sitting around this table, very much wants that to be the case once again.”


  1. Apple now has Rhapsody as an app, which is a great start, but it is currently hampered by the inability to store locally on your iPod, and has a dismal 64kbps bit rate. If this changes, then it will somewhat negate this advantage for the Zune, but the 10 songs per month will still be a big plus in Zune Pass’ favor.

  2. This is the best blog I’ve ever seen in my life! I really appreciate you taking the time out of your busy day to share your this with everyone.

  3. You make blogging look like a walk in the park! I’ve been trying to blog daily but I just cant find writing material.. you’re an inspiration to me and i’m sure many others!

  4. Dreamin. I love blogging. You all express your feelings the right way, because they are your feeling, focus on your blog it is great.

  5. Great wordpress blog here.. It’s hard to find quality writing like yours these days. I really appreciate people like you! take care and see you soon

Your Comment

Email (will not be published)