Tribune Troubles: Take A Lesson From CBS

The Chandler Family is indeed right when it comes to a languishing old-line media firm, The Tribune Company.

The Chandlers, the second-largest Tribune shareholder and founding family of the Los Angeles Times, sent a letter to the Securities and Exchange Commission, complaining of Tribune's failed strategy of reaping profits by combining broadcasting and newspaper properties in large cities.

Tribune stations have suffered--in part because of a suffering WB network, of which Tribune had an equity interest and station affiliation, and also because of a continuing weak local advertising market, affecting stations and, increasingly, Tribune's newspapers. The company's financials have turned downward and its stock price has suffered.

The Chandlers recommend breaking up the company or selling the whole firm to a new group of managers.



Tribune decided to buy back some $2 billion in stock--as many companies do to prop up sagging stock prices. But the Chandlers say the slow-footed company should have been searching for new businesses--not standing pat with old-media assets.

The Chandlers have a point. Tribune should be doing what other old-line media companies are doing--taking TV and other content and morphing it into new-age delivery systems with new business acquisitions or deals.

It could learn from the new CBS Corp., a company that is still known for its old-line broadcasting network, its old-line outdoor advertising business, and its old-line radio stations group. Since going public this January, CBS has made a series of new-think acquisitions/deals that attempt to move their business along with new-media/video technologies.

CBS bought cable network CSTV; merged a money-losing network, UPN, with another losing operation, the WB; struck various digital Internet, VOD, and iTunes deals; and started a new Internet site, innertube, totally devoted to video content.

Tribune did make one good deal during this time period--but it was kind of back-handed, put into motion by CBS itself. Tribune stations will now be the anchors in the new CBS mini-network, the CW. But riding anyone's particular coattails will only take you so far. Local print and TV advertising sales aren't what they used to be--what with the Internet and other digital platforms nipping at old-media's heels.

The recent FCC decision to support "must carry" rules for new local TV digital signals given to traditional TV stations would seemingly hand Tribune stations a nice early Father's Day gift. But that's only the start. Programming those stations will be a bigger job.

In Tribune's defense, the Chandlers should note that many media companies' stock prices have suffered--not just Tribune's alone. There is blame to go around, however. These changing advertising and technology times are where managers, like those at Tribune, need to prove their mettle.

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