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The Tribune Company is reevaluating its so-called "self-help" plan even as its interest in real estate magnate Sam Zell's takeover offer evaporates, the Wall Street Journal reported today. The in-house restructuring would entail taking on debt to pay a dividend, spinning off the TV-station group and selling the Chicago Cubs baseball team. But ongoing declines in print-ad revenues mean the company will likely borrow less and pay a smaller dividend than originally intended. Zell intended to finance his proposed $13 billion buyout in part by giving majority control to an employee stock-ownership plan [ESOP], but such a plan would require Tribune employees to attach their retirement benefits to company stock -- a risky proposition in the current newspaper environment. An ESOP would give the company some tax breaks and enable it to buy out its largest shareholder, the Chandler family; but would also involve the assumption of a worrisome amount of debt. The company, which owns The Los Angeles Times, Chicago Tribune, Baltimore Sun and Newsday, has set a March 31 restructuring deadline. Tribune shares closed down 1.66% yesterday at $29.62.

Sources: Wall Street Journal, Reuters, Washington Post, Chicago Tribune, New York Times
Commentary: A Sam Zell Takeover May Be Tribune's Best Bet - Barron'sTribune Mulls Offer from Sam ZellWSJ: Tribune Co. Now Leaning Away From Selling Itself
Stocks/ETFs to watch: The Tribune Company (TRB). Competitors: Dow Jones & Co. Inc. (DJ), Gannett Co., Inc. (NYSE:GCI), New York Times Co. (NYSE:NYT)
Conference call transcripts: Q4 2006

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Source: Tribune Reviewing "Self-Help" Plan