* Former Discovery Comms COO Liguori expected to be CEO
* New board includes former execs of Yahoo, Disney
* LA Times could fetch $130 mln in auction-analyst
* Company includes 23 TV stations, 8 dailies
By Liana B. Baker and Ashutosh Pandey
Dec 31 U.S. media giant Tribune Co
emerged from bankruptcy on Monday, ending four years of Chapter
11 reorganization and potentially setting itself up for a future
Tribune's controlling owners, which include hedge funds
Oaktree Capital and Angelo, Gordon & Co, and JPMorgan
Chase & Co intend to sell most, if not all, of its
newspapers and already have expressions of interest for The Los
Angeles Times, The Orlando Sentinel and others, Reuters has
For now at least, the Chicago-based company said its
portfolio would include eight major daily newspapers and 23 TV
Tribune's newspapers remain profitable despite the falloff
in readers and advertising. Veteran newspaper analyst John
Morton, President of Morton Research, estimated the Los Angeles
Times could fetch $130 million at an auction, while the Chicago
Tribune could garner $86 million in a sale.
Oaktree is the biggest Tribune shareholder, owning about 23
percent of the company while Angelo Gordon and JP Morgan each
hold a 9 percent stake.
"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," Chief Executive Eddy Hartenstein said
in a statement.
As part of the Chapter 11 exit, the company closed on a new
$1.1 billion senior secured term loan and a new $300 million
asset-based revolving credit facility.
The term loan will be used to fund certain payments under
the plan of reorganization and the revolving credit facility
will be used to fund ongoing operations, the company said.
Tribune's most actively traded debt, a $5.5 billion loan due
in May 2014, was most recently trading at 83 cents on the
dollar, according to Thomson Reuters data.
Upon exiting bankruptcy, Tribune will have issued to former
creditors a mix of about 100 million shares of new class A
common stock and new class B common stock, and new warrants to
purchase shares of new class A or class B common stock.
Hartenstein will remain CEO until the new Tribune board
names a new management team. Peter Liguori, a former Discovery
Communications chief operating officer, is expected to be named
The company announced a seven-person board that includes
Hartenstein, Liguori, former Yahoo CEO Ross Levinsohn
and Peter Murphy, Walt Disney's former top strategic
Tribune is expected to focus on building its TV operations.
In its portfolio, it owns WGN America, a national feed of
Tribune's Chicago TV stations that it distributes through cable
and satellite to more than 76 million U.S. homes.
Horizon Media analyst Brad Adgate said WGN could expand its
base by 20 million to 25 million homes if it adds original
programming to its lineup.
Tribune's TV operations are estimated to account for $2.85
billion of the company's $7 billion valuation, while its
publishing assets are estimated to represent $623 million,
according to a report by its financial advisor, Lazard. The rest
of its value resides in assets including its 30 percent stake in
the Food Network and its cash balance.
In November, Tribune received regulatory approval from the
Federal Communications Commission to transfer its broadcast
licenses to the owners who would take it over after emerging
Real estate magnate Sam Zell stunned the media industry when
he took the company private in 2007 in an $8.2 billion leveraged
buyout that burdened the company with debt and that many
observers warned would be disastrous. Tribune was forced into
bankruptcy in 2008.
The company's reorganization plan was confirmed by the
Delaware bankruptcy court in July.
The case is In re: Tribune Co et al, U.S. Bankruptcy Court,
District of Delaware, No. 08-13141.