BRIEF-Valeant says completed amendment to third amended, restated credit, guaranty agreement dated Feb 13, 2012
March 28 Valeant Pharmaceuticals International Inc
By Jack Shafer
Jan 8 Oh to be a fly on the wall Jan. 15, when Tribune Co. executives meet with the staff of Rep. Henry A. Waxman, D-Calif., in a command performance to explain the media conglomerate's plans to spin off its newspapers - which include the Los Angeles Times, the Chicago Tribune, and the Baltimore Sun - into a separate company named Tribune Publishing.
Waxman called for the meeting in mid-December after Tribune filed its blueprint with the Securities and Exchange Commission, arguing in a letter that the restructuring may not "be in the best interests" of his constituents, who live in the Pacific Coast-hugging congressional district that runs inland to include Beverly Hills. The spin-off will essentially defund the newspapers, Waxman argued, specifically the Los Angeles Times, which his district depends on for news. Under the terms of the restructuring, the Tribune Publishing newspapers will pay a cash dividend to Tribune Co. The newspapers will also lose their real estate holdings, forcing them to pay rent for their current facilities.
Waxman worries that the deal endangers the long-term survival of the Los Angeles Times, which like most other newspapers has shrunken its newsroom as advertising and circulation have fallen over the past decade. In a second letter to Tribune, which he also made public, Waxman wrote, "At a minimum, you appear to be putting the profits of the Tribune Co. ahead of the interests of the public in viable local newspapers." In it, he asked Tribune to forward to his staff a raft of relevant spin-off documents before the Jan. 15 meeting.
Absent evidence of law-breaking by Tribune, how can the company's restructuring be the business of Congress or Henry Waxman? So far, Waxman hasn't deployed any bogus rhetoric about the "stakeholders" who read the Los Angeles Times having rights equal to those of the shareholders who actually own the property. But it's early yet. Waxman may get there soon if Tribune's executives don't acquiesce to his charms.
So why doesn't Tribune tell Waxman to go find a hot place and jump into it? Probably because after it sheds its newspapers, its primary assets will be in the highly-regulated business of broadcasting, where it owns 23 television stations. As a member of the House minority, Waxman can't cause Tribune much in the way of regulatory trouble now, but what if the House flips? (Waxman was, after all, the chair of the Energy and Commerce committee.) Game theory encourages the Tribune to act the supplicant, perhaps giving Waxman some cheap token for his blessing, and then do basically what it was going to do in the first place.
If the property rights argument doesn't grab you, maybe the First Amendment one will. Again, in the absence of law-breaking, such as violating anti-trust or defrauding stockholders, it's not within the power of Congress to determine how newspaper properties can be sold. Unlike the Federal Communications Commission's adjudication of broadcast license sales, no Federal Newspaper Commission exists to rule on who can own and who can sell a newspaper.
Let's say the Tribune Publishing spin-off that Tribune envisions is as unviable as Waxman imagines it is. Tribune Co. can't force people to buy stock in Tribune Publishing if, as Waxman imagines, it has been ransacked on the way out the door and loaded up with too much debt to survive. It's in Tribune's interest to make the spin-off attractive to investors, not repulsive. Likewise, it's also in Tribune's interest to avoid marbling too much fat into the newspaper meat as it prepares them for sale. That's a sure way to fail to capture the highest value for its assets. It's safe to say that the "uglier" the deal looks to somebody like Waxman, the lower the price Tribune will be able to command for the papers and the more money the new owner will have to invest to make them more profitable.
As for Waxman's horror that the Los Angeles Times will be paying rent to Tribune to operate out of the palatial Los Angeles Times Building under the new order, who says its new owner must keep it there? The paper can move to a cheaper place. Besides, I'm guessing that the first thing the new Los Angeles Times would do with the Times Building if it conveyed with the sale would be to sell it. Newspapers across the country - Miami Herald, Washington Post, Seattle Times, Minneapolis Star Tribune, Boston Herald, Kalamazoo Gazette, Philadelphia Inquirer, et al. - have left or have announced departures from their old buildings for more modest addresses as their workforces have dwindled and their office space needs have declined. So what's the big deal here?
In abandoning newspapers, the broadcasting-centric Tribune is wisely exiting a business that is already sunsetting. Although no almanac predicts the precise date and time that sunset will arrive, almost nobody thinks metropolitan dailies like the Los Angeles Times have more than a decade (or two, if you're an optimist) of life left in them. Henry Waxman can request all the documents he wants from Tribune, but not even he can roll back the Internet, smartphones, and BuzzFeed.
I worry about the news needs of Henry Waxman's constituents as much as he does - those wealthy citizens of Malibu, Santa Monica, Rancho Palos Verdes, Pacific Palisades, Topanga, Calabasas, Manhattan Beach, Marina del Rey, and (I've got to say it again) Beverly Hills. But unlike Waxman, I'm convinced that should the new Los Angeles Times fall from its current state of excellence, his constituents have resources aplenty to support quality news and information should they desire it. If they don't, that's not Tribune's problem and it's not Waxman's concern.
March 28 Valeant Pharmaceuticals International Inc
March 28 Wells Fargo & Co said it agreed in principle to pay $110 million to settle a lawsuit by customers challenging its opening of accounts without their permission, a practice that led to a scandal that cost the bank's chief executive his job.