Chicago’s Tribune board lacks Chicagoans
By David Roeder Business Reporter January 7, 2013 4:28PM
The Chicago Tribune at 435 N. MIchigan Avenue is photographed on Friday, June 8, 2012. | Richard A. Chapman~Sun-Times
Updated: February 7, 2013 6:39AM
Officially, the Tribune Co. that emerged from bankruptcy with the dawn of 2013 is Chicago-based. Its headquarters remain in Tribune Tower, the neo-Gothic landmark at 435 N. Michigan.
But that shouldn’t fool anybody.
Tribune’s seven-member board might as well save the travel expenses and meet in Southern California. That’s where they are all based anyway, in professions mostly tied to the entertainment business.
The new Tribune board is a profound example of the changes transforming what used to be a visible, powerful company in Chicago’s highest corporate sphere. Its makeup also indicates that Tribune’s new owners are unlikely to be in it for the long haul, and will break up its assets.
Most analysts expect the creditors who now own Tribune will sell the company’s newspapers, including the flagship Chicago Tribune and the Los Angeles Times. The papers mostly are posting meager profits, while the company’s 23 television stations are faring far better, according to financial reports submitted to bankruptcy court.
Owen Youngman, professor of digital media at Northwestern University and a former Chicago Tribune executive, said the company always has been a hybrid of news and entertainment properties, investments and operating businesses. He said he expects the new owners will shed the newspapers, although perhaps not quickly.
“What you’ve seen in some newspaper markets is that there are purchasers who are interested in more than the book value of the asset,” Youngman said. He cited the Wrapports LLC purchase of the Chicago Sun-Times and related newspapers in late 2011 as an example. Wrapports paid more than $20 million when the company was two years out of bankruptcy with the intent of changing the organization from a print-focused set of titles to a company focused on digital businesses.
Local business leaders interested in a platform as well as profits might bid up the value of Tribune papers. Rupert Murdoch is a possible buyer of the Chicago Tribune and Los Angeles Times and plans a spinoff of his News Corp. to make that easier in the eyes of regulators.
Entertainment mogul David Geffen and California publisher Aaron Kushner have been interested in buying the Times.
What to sell will be up to a board that includes Peter Liguori, who is expected to become Tribune Co.’s chief executive officer. As a former chairman of entertainment at Fox Broadcasting Co., he is one of several Tribune directors with a Murdoch history.
In years past, Chicago CEOs such as James O’Connor, Patrick Ryan and Donald Rumsfeld watched over Tribune interests. Its board was one of the most exclusive clubs in Chicago and a passage to the trust of other corporate leaders.
The Chicago influence remained through Tribune’s spectacular — but doomed — acquisition in 2000 of Times Mirror Co. and through the 2007 takeover by real estate magnate Sam Zell, also a local guy. The Zell board included William Osborn, former chairman of Northern Trust Corp., and Betsy Holden, former co-CEO of Kraft Foods Inc.
With its California tilt, the post-bankruptcy board represents owners such as Oaktree Capital Management LP, with a 22 percent Tribune stake; and Angelo, Gordon & Co. and JP Morgan Chase & Co., with 9 percent each.
Tribune spokesman Gary Weitman declined to comment on the new board. The Tribune long has been a national company and with owners now concentrated on the East and West coasts, the Chicago board shutout reflects reality.
The more important point, Youngman said, is the transitional nature of the board. Tribune is now in the hands of investment firms with little taste for operating businesses for an extended time, he said.
“For Chicago, Los Angeles, Baltimore and all the other places with Tribune newspapers, the identity of the next owner is more important than the identity of the current one,” Youngman said.