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Tribune Company Finally Exits Bankruptcy

Earlier this month was the four year anniversary of the Chapter 11 bankruptcy of Chicago's Tribune Company. It filed for bankruptcy protection in December 2008, with approximately $13 billion in debt, just one year after real estate developer Sam Zell completed the $8.2 billion leveraged buyout of the corporation. As of today, that bankruptcy is finally over. It also means a new and very different era begins for the media giant.

Today will bring an end to the incredibly drawn out case #08-13141 in the U.S. Bankruptcy Court, District of Delaware.

Tribune Company emerges from bankruptcy with all of its assets intact. Those assets include eight major daily English language newspapers and many other print publications, twenty-four local television stations, two national television networks, one radio station, as well as numerous other websites and companies. Locally, among the company's bigger properties include the WGN-AM, WGN-TV, CLTV, Chicago Tribune, RedEye, Hoy, Chicago Magazine, and Naperville Magazine.

The company also now has new owners assigned to it, as the ownership has been handed over by the courts to Tribune Company's largest creditors: Oaktree Capital Management, JPMorgan Chase, and Angelo, Gordon & Co. This marks the first time since the Tribune was founded in 1847 that the company will be owned by entities outside of Chicago.

Immediately a new Board of Directors will be installed for the company. According to numerous reports, the new board will be made up of Peter Liguori, Peter Murphy, Bruce Karsh, Kenneth Liang, Ross Levinsohn, Craig Jacobson, and soon-to-be-former TribCo CEO Eddy Hartenstein. One of the Board's first duties will be to assign a new CEO, which looks to be former television executive and new Board member, Peter Ligouri. The appointing of a new CEO will take place in early 2013. Hartenstein will remain CEO until then.

Liguori, 52, began as an advertising executive who then went into television programming. He was named as President of FOX's cable network FX in 1998, and promoted to CEO in 2001. In 2005, he was elevated to the role of President of Entertainment for Fox Broadcasting Company. In 2009, he was forced out from FOX and joined the Discovery Network as COO. Ligouri was instrumental in the start of the Oprah Winfrey Network (OWN), wooing Oprah Winfrey away from Chicago. For two months last year, he was the Interim CEO of OWN, until Winfrey herself took over that role, forcing out Ligouri. Since July of this year, he has been a consultant in New York for the private equity firm, the Carlyle Group.

Along with the appointment of new executive Board members, as part of the bankruptcy exit, Tribune Company will gain a new $1.1 billion senior secured term loan, as well as a new $300 million line of revolving credit. The term loan will be used to pay creditors. Additionally, creditors will be issued approximately 100 million shares of different common stocks in the company. The new creditor ownership group will also be taking approximately $1.85 billion from the pool of accumulated cash which the company has set aside during the bankruptcy proceedings, in addition to the proceeds the creditors will get from the term loan. The revolving line of credit will be used to support the ongoing day-to-day operations of the company. Over $300 million from that pool of accumulated cash will also be able to be used for operations expenses by the company.

Soon after the first of the year, it is assumed that the new Tribune Company will look to sell off its newspaper/print division.

The print division of Tribune Company consists of:
Chicago Tribune
Chicago Magazine
RedEye (Chicago)
Hoy! (Chicago & Los Angeles)
Los Angeles Times
The Sun (Baltimore)
Sun Sentinal (Fort Lauderdale)
El Sentinal (Fort Lauderdale)
Orlando Sentinel
El Sentinel (Orlando)
The Hartford Courant
The Morning Call (Allentown)
Daily Press (Hampton Roads)
Additionally, many of these newspapers own suburban weekly publications.

The crown jewels of the print division are the LA Times and the Chicago Tribune, two of the nation's largest newspapers. The sale of the company's newspaper division would bring in a fast flow of cash to the new creditor owners, who are seeking to recoup its investment losses by any means it can.

Although no Tribune-owned newspapers are officially for sale just yet, there are already individuals and companies coming forward expressing sincere interest in some or all of the print properties. Among the suitors are Aaron Kushner, Publisher of The Orange County Register (a competitor of the Los Angeles Times) and the CEO of the investor group 2100 Trust LLC, Doug Manchester, the San Diego Union-Tribune owner, Warren Buffett, famed business investor, and Rupert Murdoch, Chairman and CEO of News Corporation.

The selling off of its print publications will then allow the company to primarily focus on Tribune Broadcasting and its television assets.

It is believed that Liguori will look to strengthen Tribune Broadcasting's television properties, possibly even expanding them by purchasing other stations. He especially will look at re-energizing and re-imaging the under-used cable/satellite superstation, WGN America. Depending on the profitability (potential and realized) of the television division, the creditor-owned company may choose to hang on to Tribune Broadcasting for years, or may look to simply boost the properties up and then sell them off completely at some future point.

The only question mark is the 2013 fate of WGN-AM, Tribune Broadcasting's sole radio station. The sale of one of the most famous radio stations in history could bring in a fast amount of income for the company in 2013 and allow Tribune Broadcasting to focus entirely on its television stations, as well as on Tribune Interactive's web-based properties.

One thing known for sure is that major changes are in store for all Tribune properties in 2013. Just what those changes will entail remains to be seen.

An email was sent out to Tribune Company employees this weekend by CEO Eddy Hartenstein talking about today's major corporate changes. In it, he said: "Tribune will emerge as a dynamic multi-media company with a great mix of profitable assets, powerful brands in major markets, sufficient liquidity for operations and investments and significantly less debt. In short, Tribune is far stronger than it was when we began the Chapter 11 process."

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