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TRIBUNE-TIMES MIRROR MERGER

The Chandler Dynasty Steps Aside

Media: Through The Times, which it owned for more than a century, the family shaped Southern California.

March 14, 2000|DAVID SHAW | TIMES STAFF WRITER

"No single family dominates any single region of the country as the Chandlers have dominated California," David Halberstam wrote in "The Powers That Be," his 1979 book on the media, and indeed, for more than a century, it was the Chandler family--more than any other force or institution--who shaped the development of Los Angeles and its sprawling environs.

Water for a desert city. A port for a landlocked city. A Music Center for a city with little in the way of formal culture. The aerospace industry. The movie industry. An important center for scientific study and research. Major league baseball. A future president of the United States. The Chandler family, operating largely through the Los Angeles Times, played a major role--generally the major role--in turning all those dreams into realities.

Now the Chandler family has surrendered both ownership of the paper and leadership in the community to a media company headquartered 1,750 miles away--and they have done so in negotiations conducted in such secrecy that Otis Chandler, the man most responsible for the transformation of The Times itself from journalistic mediocrity to excellence, said he didn't know about the deal until it was completed.

Chandler, publisher of The Times from 1960 to 1980, said Monday that his first inkling that something big was about to happen to the newspaper that his family had controlled since 1884 came last Friday, when he began receiving phone calls asking what he knew about a wide range of corporate rumors suddenly sweeping Times Mirror Square, at least one of them involving a takeover of The Times' parent company, Times Mirror, by Tribune Co. of Chicago. But he said the rumors remained rumors to him until late Sunday night, when the Times Mirror board of directors approved the deal with Tribune Co.

Chandler said he made no effort to find out if the rumors were true "because I knew that would put anyone I called in a difficult position. I didn't call any board member, any officer of the company, any of the trustees."

Chandler's sister, Camilla Chandler Frost, one of seven trustees of the two Chandler Trusts that control about 65% of Times Mirror stock, confirmed that she did not speak to her brother about the deal until Monday morning. She said she and all other members of the Chandler Trusts and the Times Mirror board were sworn to secrecy during the negotiations.

"I couldn't even tell my children," she said. "We were told that if anyone found out, it would be a deal-breaker."

Frost said she found keeping that secret "very hard. Otis and I are pretty close and we're used to communicating," she said, "but he wasn't upset because he understands that this is the way big deals like this work . . . and because he is so positive about the deal itself."

That he is.

"I wasn't surprised by the announcement," Chandler said, "because I was not happy with current management of The Times and Times Mirror, and my assumption was the [board of] directors and the family weren't happy either, and under those circumstances, to move forward in this mega-merger world, one has to consider merging."

'It's a Very Positive Move'

Chandler has long felt that it would be difficult for Times Mirror to survive as an independent company in a world of growing consolidation, and he said Monday, "Of all the people, of all the media companies that Times Mirror could join, this is the most logical and probably the best company. It's a very positive move for The Times and for Tribune. It's a win-win situation. We're not a major presence in the Internet world, and they are. We don't have TV stations any more, and they do. There couldn't be a better fit."

Frost agreed on all counts.

"The Tribune is such a forward-looking multimedia company," she said. "This deal puts us in every major market, and it's good for all the shareholders."

It's especially good for the Chandler family, whose cumulative shares in the deal are now worth $1.43 billion, based on Tribune Co.'s closing stock price Monday. (Terms of the deal provide that Times Mirror shareholders can choose between taking $95 per share from Tribune Co. or exchanging each of their Times Mirror shares for 2.5 shares of Tribune Co. stock. Family shareholders are expected to take the exchange.)

Tribune's diversity was a major factor in the family's decision to sell Times Mirror, Frost said, and others close to the negotiations agreed. The Chandler Trusts expire in about 23 years--the exact date depending on the life spans of those named in the trusts--at which point all assets in the trusts would be distributed to the beneficiaries. The combined assets of Tribune Co. and Times Mirror were deemed a more valuable holding in the future than Times Mirror alone, especially in light of Tribune Co.'s aggressive move into electronic and digital media.

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