MEDIA - FCC expected to lift barrier to Tribune deal
WASHINGTON — Federal regulators are poised to approve Tribune Co.'s $8.2-billion deal to go private by the end of the week, clearing the way for the transaction to close by Dec. 31.
Federal Communications Commission Chairman Kevin J. Martin removed the remaining regulatory obstacle to the deal Wednesday, proposing to exempt Tribune for two years from rules prohibiting ownership of a newspaper and a broadcast station in the same market. Tribune needs the waivers for its newspaper and TV combinations in Los Angeles, Chicago, New York, South Florida and Hartford, Conn.
The FCC is expected to approve the proposal by Friday, giving Tribune time to complete the transaction by the end of the year. The Chicago-based owner of The Times and KTLA-TV Channel 5 faces financial penalties if the deal, led by real estate magnate Sam Zell, closes after that.
"Based on Chairman Martin's description of his proposal . . . we are pleased, and believe that, if we get the commission's vote by Friday, we will be on track to close the Tribune transaction by year end," Zell said in a written statement.
Amid a Wall Street rally Wednesday, Tribune's stock shot up 10% to $30 on the news. But even that surge left the stock 12% below the $34 buyout price, indicating that some investors are doubtful the deal will close.
Tribune has said consistently that the financing is locked in place.
"The banks are still committed, and there is no indication of any change in the terms," said a person close to the deal who spoke on condition of anonymity, citing the confidential nature of the negotiations. Even a delay of a few days could have pushed the process "down to the wire," the person said, adding: "We need that vote on Friday."
Tribune's sale of the Chicago Cubs baseball team, meanwhile, could be delayed until next year, according to baseball Commissioner Bud Selig. The company hoped to seal a deal this year, with analysts estimating that bids might top $1 billion.
But Selig said Tribune would not release financial data on the team to potential buyers until January. "People haven't even started bidding yet," Selig told the Reuters Media Summit.
At the FCC, the proposed waivers would cover the company while Martin pushes a broader plan to ease the cross-ownership ban in the nation's top 20 markets. Under that plan, Tribune could continue to own its newspapers and TV stations in Los Angeles, Chicago, New York and South Florida but would have to sell its paper or two TV stations in Hartford. The waivers apparently would allow Tribune to keep its Hartford properties for two years.
