WSJ lays out L.A. Times mess

The Wall Street Journal (subscription required) examines the growing pressures at Tribune Co. to sell the LAT. Still no sign that Tribune wants to deal. Scott Smith, president of Tribune Publishing, points out the importance of the LAT as a central source of content for the Tribune's other papers (that must make for happy reading at the Chicago Tribune). There's also the financial consideration: The Times contributes about a quarter of total revenue for Tribune Publishing. That's big money Tribune won't be happy to give up.

There could be some more developments in the next week or so. Tribune CEO Dennis FitzSimons is expected to present a plan on the future of Tribune at a board meeting on Thursday. Last week, there were lots of rumors flying around the Chicago and L.A. newsrooms about possible asset sales and management changes. At this point, it would seem that Tribune will need to do something; the vice chairman of Ariel Capital, which has 6 percent stake of the company, says as much in the WSJ.

The fact that the value of the assets of Tribune significantly exceeds the current stock price is indisputable. The market seems to be betting that the board will not take action to realize that value. We at Ariel have every confidence that the board will take those steps. At this time, we are making no specific recommendation as to steps the board should take.

The story notes that Eli Broad and Ron Burkle recently met with representatives of the Chandler family - Tribune's largest shareholder - to discuss how they might structure the purchase of the paper. Apparently, those talks didn't go anywhere, which raises the question of how serious Broad and Burkle might be in buying the paper. And there's also the role of editor Dean Baquet, who has had "numerous interactions" with Broad, according to the WSJ, and who recently attended a meeting at the City Club with the 20 civic leaders who shot off a letter to Tribune about the paper needing more resources. A long-time behind-the-scenes player, George Kieffer, seems to be the point person.

At one point, Mr. Baquet noticed a group of people signing a piece of paper in the corner of the room. "I assume you're working on this famous letter," he quipped to Mr. Kieffer, according to several people who were there. "You know I can't talk about that."

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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