Tribune Co. to split off papers into a separate company*

The new entity, to be called Tribune Publishing, would include the LA Times, Chicago Tribune, and six other daily papers. All other assets, including stakes in several websites, would remain part of Tribune Co. This would suggest that for whatever reason, the possible sale of the papers isn't moving the way many had anticipated (the financial books haven't even gone out to interested parties.) I mean, you don't make plans to split the company in two if you're about to auction off one of those two units. Tribune didn't really explain why it was making this move, other than a typically corporate-ease release that talked about "seizing strategic growth opportunities with maximum flexibility." Well, that's fine, but they obviously wouldn't be taking this step if there were potential buyers ready to cut a sweet deal. Newspaper properties remain severely depressed - late last year, the Tampa Tribune sold for a paltry $9.5 million, as an example. At Tribune, ad revenues continued to drop in the second quarter, with the LA Times among the bigger problem areas (though the Times is still profitable). It's worth noting that splitting off your company like this is not an easy process; when Rupert Murdoch's News Corp. announced that it wanted to spin off its newspaper operations from its broadcast and entertainment properties, it took many months. You're talking about getting regulatory approvals, about forming a separate board of directors, a separate management team - it's quite an ordeal. The Tribune people did say that they would still consider selling off their newspapers, but this morning's announcement would indicate that for the time being, the L.A. Times, the Chicago Tribune and the other papers will remain in tact. As for Tribune Co., its interest seems to be focused in television stations; last week the company said it was purchasing another 19 stations, which makes Tribune the nation's largest broadcaster (here in L.A. it owns KTLA, Channel 5).

* WSJ notes that while the company's publishing operations still account for nearly two-thirds of total revenue, they only comprise about 20 percent of operating profit. The rest comes from broadcasting.