Tribune to meet California's Rep. Henry Waxman to discuss concerns over spinoff's impact on Los Angeles Times
Chicago-based media company Tribune Co. said its management plans to meet with California Democrat Rep. Henry Waxman to discuss his concerns about the impact on the Los Angeles Times of its proposed newspaper spinoff.
According to Wall Street Journal, Waxman raised his concerns in a letter to Tribune chief executive Peter Liguori last week. The congressman pointed to Tribune's disclosures in a regulatory filing this month. The disclosure said that the newspaper company created in the spinoff would take on debt to finance a special dividend to Tribune.
In the letter released to the media, Waxman said that requiring the post-spinoff newspaper unit to go into debt to pay a cash dividend to Tribune will undoubtedly enrich Tribune. The dividend recapitalization will be at the expense of the financial health of the LA Times and the other papers in the newspaper unit, all of which are already facing financial strains.
The size of the dividend as well as the amount of debt to be taken on by the new company weren't disclosed in the filing, the report said.
Tribune in July said it planned to split its newspaper division from its more-profitable TV-broadcasting division. Tribune Publishing, the name of the post-spinoff company, would include LA Times and other Tribune papers such as Chicago Tribune and Baltimore Sun. It will apply to list on the New York Stock Exchange, WSJ said.