Tribune Co.’s split could pave way for sale of papers

Tribune Co.’s plan to spin its publishing assets into a separate company — and hold on to its major profit centers at the same time — could set the table for a tidy sale of its newspapers, a veteran industry analyst said Wednesday.

If that’s the case, John Morton said, the company would likely aim to sell the newspaper chain that includes the Chicago Tribune in one uncomplicated transaction rather than let the papers go piece by piece.

But the price tag for the new Tribune Publishing Co. might fall below previous estimates valuing the papers at about $625 million, Morton said. The math ending with that figure took into consideration assets like the job site CareerBuilder.com, he said.

Tribune Co. plans to keep its equity interests in CareerBuilder and Classified Ventures along with its real estate interests and broadcast businesses.

“It might mean that it won’t be that high,” Morton said of the potential sale price for the newspapers.

If Tribune Co. also takes on a potential $500 million tax liability hanging over its head, Morton said, it could clear up another potential sticking point in a sale.

Chicago-based Tribune owns 23 TV stations and the cable network WGN America along with the Chicago Tribune and other newspapers. Reflecting an industry trend seen recently as News Corp split from 21st Century Fox, Tribune Co. announced early Wednesday its own plan to spin its newspapers off into Tribune Publishing Co.

Financial results last month showed most of Tribune Co.’s revenue comes from its newspapers, but the profits are overwhelmingly from broadcasting.

“The two companies resulting from this transaction would each have revenues in excess of $1 billion and significant operating cash flow,” Peter Liguori, Tribune’s president and chief executive officer, said in a statement.

The company’s press release said Tribune’s management team will spend the next nine months to a year developing detailed separation plans. Morton acknowledged that could further delay an anticipated sale of the newspapers.

Whenever it happens, Morton said the new arrangement appears to cater to a buyer “who could step up to the plate with the full amount” to pay for the publishing company. Rumored buyers who could fit the bill are the conservative industrialists Charles and David Koch, as well as Orange County Register publisher Aaron Kushner. Wrapports LLC, owner of the SunTimes, has said that it is interested in some of the Tribune Co.’s publishing assets.

Meanwhile, Owen Youngman, digital media strategy professor at Northwestern University, said it’s not clear how established synergies between the Chicago Tribune and its broadcast partners atWGN will continue in terms of content and advertising sales.

“It’s not to say that won’t continue,” Youngman said, “but how will they negotiate that, plan that and pull that off?”