Tribune Co. has announced plans to spin off its beleaguered newspaper unit into a separate company, freeing the media conglomerate to focus on its more promising television and Internet properties.
The new Tribune Publishing Co. would include the Los Angeles Times, the Chicago Tribune and six other daily papers, The Times reported today. All other assets, including the company’s real estate holdings and stakes in several Internet sites, would remain part of Tribune Co.
The spinoff would be tax-free to Tribune shareholders and could take as long as a year to complete.
Other media companies, notably Rupert Murdoch’s News Corp., have spun off their publishing units. The goal is to boost the stock market value of the broadcast properties by unshackling them from the newspapers, whose revenue has been declining sharply, The Times reported.
“Each will be a stronger company when separated from the other,” Peter Liguori, Tribune’s chief executive, said in a memo to employees Wednesday.
Until now, Tribune had appeared to be taking steps to unload the newspapers in a private sale, according to The Times.
In February, the company hired investment bankers to advise on a potential sale and vet potential buyers. Several prominent suitors — including industrialists Charles and David Koch, Murdoch and local philanthropist Eli Broad — have expressed interest, according to sources quoted by The Times.
But the process has moved slowly and Tribune has yet to open the newspapers’ books to potential buyers, although the papers still could be sold at any time and the idea of the spinoff abandoned, according to The Times.