Times Mirror, Tribune Co. are poised for media merger

Sun parent company in acquisition talks

March 13, 2000|By Bill Atkinson | Bill Atkinson,SUN STAFF

The Times Mirror Co., publisher of newspapers, including The Sun and the Los Angeles Times, is in discussions to be acquired by the Tribune Co., owner of the Chicago Tribune and television and radio stations across the nation.

Although top executives of neither company would discuss the matter early this morning, a spokeswoman for Los Angeles-based Times Mirror confirmed the talks.

"Advanced discussions are under way . . . to merge the two companies," said the spokeswoman, who asked not to be identified. "We expect the discussions to conclude shortly."

Sources said the Times Mirror board of directors was meeting last night and was prepared to approve the sale. It could be concluded formally today.

Although financial details were not known early this morning, the acquisition would form a news media conglomerate with 11 dailies, 22 television stations and a market value of $11.7 billion. The company would be named Tribune Co. and have its headquarters in Chicago.

The sale, if approved, would mark the end of a tumultuous, yet financially successful five-year reign by Times Mirror Chairman Mark H. Willes, whose stewardship was called into question by the Chandler family, founders of Times Mirror and its flagship newspaper, the Los Angeles Times.

Sources last night said that Willes will leave the company upon its acquisition. There were unconfirmed reports that he would make his own statement about the sale, perhaps as early as today.

The Chandlers, who control 70 percent of Times Mirror stock, initiated the acquisition talks without the knowledge of Willes, those sources said.

Willes, a former executive of General Mills Inc., was hired in June 1995 by Times Mirror as president and chief executive officer to turn around the company's sagging fortunes.

He quickly set about reshaping the company through major cost-cutting -- including closing The Evening Sun and New York Newsday -- and selling assets that left Times Mirror primarily a newspaper operation, even while most news media companies were tying their futures to cable television and the Internet. Last month, the company agreed to sell the Sporting News, the country's oldest sports weekly.

His efforts won favor on Wall Street, which boosted Times Mirror shares from $23.25 in June 1995 to $72.125 on Oct. 29. Although the company's earnings improved, his strategy appeared to falter over the past 18 months. The stock has fallen by 34 percent, to $47.6875, in the past four months.

The Chandler family became increasingly dissatisfied, not only with the company's sliding stock but also with Willes' attempts to get the news operations to work more closely with the business side -- which historically have been separate.

Willes came under intense criticism last year after the Los Angeles Times entered an arrangement to split advertising revenue with the Staples Center as the newspaper was writing stories about the arena in downtown Los Angeles.

The newspaper devoted its entire Sunday magazine, 164 pages, to photographs and articles about the new arena.

Newspaper editors from across the country criticized Willes, Publisher Kathryn M. Downing and Editor Michael Parks, who knew about the arrangement before the magazine was distributed to subscribers.

Willes, who pushed to break down the traditional barrier between the newsroom and advertising, apologized.

Times Mirror purchased The Sun, the former Evening Sun and WMAR-TV in 1986 from the A. S. Abell Co. for $600 million.

Its other newspapers include Newsday, the Hartford Courant and the Allentown Morning Call.

The Tribune Co. is a far-flung media empire that owns newspapers, TV and radio stations, and publishes books and educational material.

It newspapers include the flagship Chicago Tribune, which was founded in 1847, as well as the Sun-Sentinel in Fort Lauderdale, Fla.; the Orlando Sentinel and the Daily Press in Newport News, Va.

The company's Tribune Broadcasting owns and operates 18 major market television stations, including superstation WGN-TV. Its affiliates operate across the country. Tribune reaches more than 75 percent of U.S. television households, including cable and satellite coverage.

It also owns the Chicago Cubs baseball team, and Tribune Entertainment, which develops and distributes first-run television programming.

The deal, which is being done on friendly terms, was initiated by board members close to the Chandler family and "may have been made initially without Willes' knowledge," Newsday reported.

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