FCC Chairman Proposes Waiver for Tribune Deal

Tribune Company shares rose 10% to close at $30.00 Wednesday after FCC Chairman Kevin Martin proposed a vote this Friday on waivers that would permit Sam Zell's $8.2 billion buyout of the company to move toward completion by year-end. "If the FCC approves, the deal is done," said Ed Atorino, an analyst at Benchmark Co. The waivers will permit Tribune to own newspaper and broadcast properties in the same market, thus obviating the need for Tribune to divest assets. If the waivers are granted, Tribune will be exempt from cross-ownership restrictions for at least two years. Should they be challenged in court, they will remain in place until six months following the end of litigation. Martin told reporters Wednesday the waivers "would allow for Tribune and purchaser to still have the 20 business days that I understand they need to try to close the transaction by the end of the year." The matter was urgent for Tribune and Zell, who must close by year-end and have a corporate structure in place to guarantee the tax breaks on which the transaction is based. They applied for the waivers in May, and the long delay in setting a vote led the FCC's two Democratic commissioners to accuse Martin of using the deal to gain support for a wider political agenda. "Tribune, long a respected and influential institution of American journalism, has been used as a human shield to provide cover for broader rule changes, even at risk to the life of the hostage itself," said commissioner Jonathan Adelstein on Tuesday.

Sources: Dow Jones, Bloomberg, ChicagoTribune.com, Wall Street Journal
Commentary: Tribune/Zell Deal in the Bag: No Longer 'If' - Just When? • Tribune Company: It's a Done Deal • Tribune Shareholders Overwhelmingly Approve Zell Buyout; More to Come
Stocks to watch: TRB. Competitors: DJ, GCI, NYT. ETFs: PBS, PEJ
Earnings call transcript: Tribune Q4 2006

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