Sun owner's chief says `all options ... are on the table'

September 27, 2006|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

The chief executive of The Sun's parent company declined yesterday to specify whether the newspaper is being considered for sale as part of an assessment of restructuring moves, saying only that "all options ... are on the table."

"We're looking at this on an entire company basis, and it just may not be possible to determine what's best for any one part of the company without first determining what's best for the whole company," Tribune Co. Chief Executive Officer Dennis J. FitzSimons said.

"Seventy percent of our employees are shareholders - they own about 11 percent of the company. So we will do what's best for our shareholders in general as well as those employees who have Tribune shares in their retirement accounts," FitzSimons said.

In an interview yesterday at The Sun's offices, before an off-the-record meeting with employees, FitzSimons said he isn't aware of anyone contacting Tribune Co. to express interest in buying The Sun. Several wealthy California businessmen have reportedly inquired about purchasing the Los Angeles Times, also owned by Tribune.

FitzSimons came to Baltimore at a time of upheaval for Tribune, whose holdings include 11 daily English-language newspapers, two dozen television stations and the Chicago Cubs baseball team. Pressured by its largest shareholder to make substantial changes, the company agreed Thursday to convene an independent committee of directors that will help decide by the end of the year which "strategic alternatives" to pursue.

Tribune's stock price has been drifting downward for the past two years, from above $50 in early 2004 to the high $20s earlier this year. Shares closed yesterday at just under $33, down slightly from the previous day but up about $2.25 since last Wednesday, before the restructuring announcement.

The Chicago Tribune - another Tribune Co. paper - reported over the weekend that management's preferred plan is to spin off most of the company's television stations, sell several of its smaller newspapers and then take the rest of the company private.

The newspaper, quoting unnamed sources, said the company has looked at a possible sale of its three Connecticut papers, including The Hartford Courant, and The Morning Call in Allentown, Pa. With the exception of the Daily Press in Newport News, Va., those are Tribune's smallest daily papers. All four - as well as The Sun, the Los Angeles Times and Newsday - were part of the Times Mirror Co., which Tribune acquired in 2000.

The Sun is fourth-largest among Tribune's 11 daily newspapers, with a circulation of about 400,000 on Sundays.

Many newspapers, not just The Sun, are struggling in today's tough advertising environment, said John Morton, an industry analyst. He doubts Tribune will sell The Sun because it is based in one of the larger media markets.

Tribune is facing increasing frustration from employees and readers as its newspapers reduce staff and trim budgets to cope with declining revenue and increased competition from other media. Los Angeles Times employees and local civic leaders sent Tribune Co. a petition recently urging no additional cuts; two weeks ago the editor and publisher took the rare step of publicly refusing requests to make further cuts at the level requested by the head of Tribune's publishing division.

The Newspaper Guild, one of the unions at The Sun, presented FitzSimons with a letter yesterday that asked Tribune to increase spending at the paper "or sell The Sun to someone who will."

Several groups have expressed interest in buying, but none appears to have launched an organized effort.

The Baltimore-based Abell Foundation - the remaining arm of the company that owned The Sun until 1986 - has long been interested in joining with investors to get The Sun back into local hands, said Robert C. Embry Jr., the foundation's president. Abell has regularly expressed that interest to the company in the past - not within the last year - through its law firm as "an unnamed client," Embry said. He said he knows of others talking along the same lines but is not aware of anyone who has made a proposal to Tribune.

It's an issue of intense interest to some locals. Among those is David S. Cordish, president and chairman of Baltimore-based developer The Cordish Co., who has frequently complained about Sun coverage of his business and other issues.

"It is extremely important to the future of Baltimore City that ownership of the paper return to locals," Cordish wrote last week in an e-mail response to questions about whether he would be interested in being an owner. "Consequently, as a person whose family and business has two centuries of roots here, and cares deeply about its future, I would do anything I could to facilitate local ownership."

In his interview yesterday, FitzSimons said that "decisions, as much as possible, are made on a local basis." He said he wants Baltimore residents to know that the company sees quality as an important part of the bottom line.

"The value of our newspaper businesses is determined by how well we serve our communities, so any suggestion that we would not want to serve those communities, well, would make no sense," he said.

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