Tribune Shares Jump as FCC Chief Favors Buyout
The chairman of the U.S. Federal Communications Commission said Wednesday he wants to grant media group Tribune a temporary exemption from U.S. media ownership rules, removing an obstacle to an $8.2 billion leveraged buyout of the company.
Tribune shares jumped nearly 13 percent in afternoon trading in reaction to the news and closed up $2.75, or 10 percent, at $30 on the New York Stock Exchange Wednesday.
FCC Chairman Kevin Martin proposed the agency grant the waivers so the company can proceed with the deal at a time when the FCC is considering his broader plan to relax ownership rules in the largest U.S. cities.
The temporary Tribune waivers proposed by Martin would last for a period of two years, or six months after the end of all litigation connected to the ownership rules.
Martin expected the commissioners to vote on the Tribune proposal by the end of the day Friday, giving the company the 20 business days it needs to close the deal by the end of the year.
Tribune is going private in a deal led by Chicago real estate magnate Sam Zell and needs FCC approval to transfer waivers that allow the company to operate television stations and newspapers in the same markets.
"We are pleased with Chairman Martin's proposal which, if approved, will enable Tribune's going-private transaction to close by the end of the year," Tribune Chief Executive Dennis FitzSimons said in a statement.
In Wednesday's comments, Martin declined to comment on any further details of the Tribune waiver proposal.
"I think that would give the commission an opportunity to consider new rules and Tribune would be able to come into compliance with those new rules as I've proposed," Martin said.
The Tribune proposal comes only weeks after Martin made a wider proposal to relax the FCC's ban on the cross-ownership of newspapers and broadcast stations in the 20 biggest U.S. cities.
Long-standing FCC rules restrict media cross-ownership and ban ownership of a newspaper and a TV or radio station in the same market, unless the FCC grants a waiver.
The overall changes proposed would ease the rules in four of five markets in which Tribune owns a daily newspaper and a TV station -- New York, Los Angeles, Chicago and Miami/Ft. Lauderdale. It would not apply to the fifth: Hartford, Conn.
Martin has said the rule change would help bolster the newspaper industry by allowing owners in the top markets to buy a TV or radio station.
Tribune and other publishers, including Media General and Gannett opposed the plan, saying it does not go far enough to loosen the rules. The plan also could require Tribune to shed its TV stations in Hartford, Conn., or the Hartford Courant newspaper.