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FCC Approves Sale of KTLA to Tribune Unit

October 05, 1985|PENNY PAGANO and THOMAS B. ROSENSTIEL | Times Staff Writers

WASHINGTON — The Federal Communications Commission on Friday approved the $510-million sale of KTLA Channel 5 in Los Angeles to Tribune Broadcasting, making it the largest price ever paid for a single TV station.

As a condition of the sale, the FCC said the parent Tribune Co. must, within 18 months of the completion of the transfer, divest itself of the Daily News in Van Nuys, which has a circulation of 145,000. In addition, it must sell cable-TV systems serving Lancaster, Lakewood, California City and Edwards Air Force Base.

Chicago-based Tribune Co. also owns the Chicago Tribune and the New York Daily News.

The sale of KTLA by Golden West Television "constitutes the most expensive station purchase in the history of the United States," said James C. McKinney, head of the FCC's mass media bureau. "That is a remarkable move forward for the broadcasting industry."

Several Challenges

The divestiture stipulations stem from FCC cross-ownership rules that bar Tribune Co. from owning both the Daily News and KTLA because they operate in the same market. The commission acted after dismissing several challenges, including one from the City of Lakewood that claimed that the rules prohibited the sale.

However, the FCC decided that "given the abundance of media serving the Los Angeles area, no undue harm nor concentration will result from permitting Tribune to divest its cable interests within 18 months after the consummation of its acquisition of KTLA."

Tribune Co. Vice President Joseph A. Hays said the purchase of KTLA will now be completed by the end of the year.

Hays described the company as "pleased with the continuing progress" that will lead to the acquisition "of a great station." At the same time, he said of the cable systems to be sold: "We're disappointed that we will have to sell some great young properties in California."

Murdoch Request

Moreover, Hays said his company is in "active negotiation" to sell all of the 15 cable systems--with a total of 215,000 subscribers nationwide--in which Tribune Co. has a majority interest.

Still pending before the FCC is a request from publisher Rupert Murdoch for a two-year grace period in which to sell the New York Post and the Chicago Sun-Times as part of his plan to purchase television stations in those cities from Metromedia. FCC officials said Friday that they hope to rule on the request by the end of the year.

According to media observers, Tribune Co.'s acquisition of KTLA will place it in a key spot among those firms that want to build a national network of independent television stations.

One analyst, James C. Goss of the Chicago firm of Duff & Phelps, said that adding KTLA to Tribune Co. broadcast properties will enable the company to reach 18.6% of the nation's homes. That total, Goss said, is "exceeded only by the three networks in audience reach."

Tribune Co. also owns WGN-TV in Chicago, WPIX-TV in New York, KWGN-TV in Denver, WGNX-TV in Atlanta and WGNO-TV in New Orleans.

Last year the company had revenue of $1.8 billion, with profits totaling $188 million. Its broadcasting properties produced revenue of $282 million and profits of $47 million.

Goss also said the purchase of KTLA, which owns nine Hollywood sound stages, will help Tribune Co. sell its own programming to other independent stations.

Cowboy star Gene Autry bought KTLA from Paramount Pictures in 1964 for $12 million. After some rocky financial times, he sold it to Golden West in 1982 in a leveraged buy-out for $245 million.

Tribune Co. spokesman Hays reiterated his company's preference to swap the Daily News for another newspaper, rather than sell it alone.

"Newspaper properties are so pricey and difficult to come by that you hate to give up a desirable property," he said. "We would much prefer a swap."

Hays added, however, that a swap is "a complex transaction. We'll continue to explore that, but we're also proceeding with the procedures that would make it possible for a direct sale."

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