The Wall Street Journal comes back today with another revelation about the Tribune Company, reporting that the owner of KTLA and the Los Angeles Times "since January has been seriously considering a restructuring that would include a spinoff of the company's broadcasting group and could pave the way for the eventual sale of the rest of the company." It's not certain to happen, but the Journal says "the discussions suggest Tribune is more seriously considering a breakup of the 160-year-old media conglomerate than previously had been known."
There is at least one major sticking point in any restructuring, said people familiar with the matter: how to unwind two complicated partnerships jointly owned by Tribune and the Chandlers that contain real estate, Tribune stock and other assets.
The two partnerships, known as TMCT I and TMCT II, were set up in the late 1990s in an effort to allow the Chandlers to diversify their holdings in Times Mirror in a tax-free manner. The Chandler family and Times Mirror each took a stake in the trusts; Tribune inherited Times Mirror's stake when it acquired the company.
The partnerships now own 51 million shares of common stock of Tribune as well as real-estate holdings including Times Mirror Square in California and various buildings, warehouses and printing plants in several states that are connected to Tribune newspapers.
Originally designed to last a long time, the partnerships are now seen by both sides as an impediment to Tribune's moving ahead with any major corporate restructuring. Because Tribune has a stake in the partnerships -- which in turn own Tribune stock -- there could be tax complications for Tribune in doing a restructuring while the partnerships still exist, said a person familiar with the situation.
Today's link via Romenesko