Tribune Strategy Melds 'Old' With 'New'
Tribune Co., to the casual observer, is perhaps best known for owning its flagship newspaper, the Chicago Tribune; the cable superstation WGN-TV; and the Chicago Cubs baseball team.
But Tribune, which plans to buy the Los Angeles Times and its parent, Times Mirror Co., for $5.8 billion, is a diversified media concern with a reputation for strong management that has its collective eye squarely on the "new media" of the Internet just as it does on the "old media" of newspapers and TV stations.
"Tribune, since 1992, has been at the leading edge of newspaper companies in terms of its embrace of the new media," said Peter Kreisky, who heads the media practice at Mercer Management Consulting.
Just one example: Tribune invested in America Online Inc. "very early on," he noted. That investment is now worth $595 million, and Tribune already has collected $261 million from earlier sales of its AOL holdings.
Now Tribune plans to use Times Mirror's assets to implement its newest strategy to exploit the opportunities available with television, newspapers and online operations. After the takeover, Tribune would not only have properties in the nation's three largest cities--Chicago, Los Angeles and New York--it would also have newspapers, TV stations and online activities in each of them to lure advertisers.
It's a broader "platform" by which the Tribune can deliver news, sports, entertainment and other information. And it expects this will appeal to more advertisers--especially companies that advertise nationally--and thus grow Tribune's earnings and sales.
That's because each region "will have a local touch with national reach," Tribune Chairman John Madigan, 62, said Monday. Tribune will be "taking what are essentially local-market media companies and putting them together into a national footprint."
"They [Tribune] create . . . a one-stop shopping area for advertisers who are looking to purchase advertising in the three largest markets," said Jeff Borden, associate editor of Crain's Chicago Business magazine.
At the moment, though, much of the Tribune's sales growth is being driven not by its four newspapers or fledgling online efforts but by its 22 TV stations, which compose the largest group of stations not owned by a TV network. That group includes KTLA-TV Channel 5 in Los Angeles, KSWB-TV in San Diego and KTXL-TV in Sacramento.
