TV, radio licenses go to new owners

Tribune

$8.3 billion leveraged buyout of the company in 2007, just before a global recession and a slump in print advertising devastated the newspaper industry.

The buyout loaded Tribune Co. with debt, and Zell failed to pull off a turnaround of the newspapers. He put the company into bankruptcy in December 2008, triggering a court fight between bondholders who held Tribune’s prebuyout debt and the lenders who funded the takeover.

A settlement approved by the bankruptcy court allowed the older creditors to try to recover some of their losses by pursuing lawsuits against shareholders and managers, including Zell.

In November, Tribune Co. won approval from the Federal Communications Commission to transfer its television and radio licenses to new owners — including JPMorgan Chase, Oaktree Capital Management and Angelo, Gordon & Co. — the last hurdle to emerging from bankruptcy. U.S. Bankruptcy Judge Kevin Carey accepted Tribune’s proposal to divide ownership of the newspaper and television company among its lenders in July.

Asset sales will be the quickest way JPMorgan, Oaktree and Angelo, Gordon & Co. can profit from their new ownership stakes, Vitanza said.

“They will get maximum value by breaking the company into little pieces and selling it off piecemeal,” Vitanza said.

The company’s owners have been seeking an adviser for a possible sale of at least some of its newspapers, people familiar with the situation said earlier this month. Rupert Murdoch, chairman and CEO of News Corp., plans to take a close look at Tribune Co.’s newspaper assets once they’re available, according to a person with knowledge of his thinking.

Tribune Co.’s board — Bruce Karsh, Ken Liang, Peter Murphy, Ross Levinsohn, Craig A. Jacobson, Liguori and Hartenstein — will meet in the next several weeks, the company said. The directors will ratify the company’s executive officers at that time. Until then, Hartenstein will remain in the CEO job, Tribune Co. said.

“Tribune emerges from the bankruptcy process as a multimedia company with a great mix of profitable assets, strong brands in major markets and a muchimproved capital structure,” Hartenstein said in the statement.