Analysts and prospective buyers are preparing for horse trading to begin over the Tribune Co.'s newspapers now that the company, whose holdings include the Los Angeles Times and the Chicago Tribune along with other media assets, has emerged from bankruptcy protection.
Tribune, which completed its bankruptcy paperwork Monday, has not announced the sale of any assets, but it is likely to do so in the next several months so it can streamline its business, said Reed Phillips, managing partner of DeSilva & Phillips, a media banking firm.
The troubled state of the newspaper industry makes those assets most likely to be sold, he added. Less clear, however, is whether the company will sell them all at once or by region selling the Chicago Tribune along with Chicago magazine, for example.
"The company is too large and complex right now, coming out of bankruptcy," Phillips said. "What's needed is a more focused strategy."
Aaron Kushner, chief executive of Freedom Communications and publisher of the Orange County Register, confirmed Monday that he was eager to buy Tribune's newspapers.
He would not say whether he had had any specific conversations with Tribune Co. executives.
Kushner said that from what he had gleaned from bankruptcy court filings and public pension documents, it seemed likely Tribune would sell its newspapers as a group.
That is because the company has such enormous and complex pension obligations and corporate overhead that it would be difficult to untangle them and sell properties individually.
"We're interested in all of the papers, though obviously, from an outside perspective, we have not seen the numbers," said Kushner. "If papers are sold, someone has to be responsible for the pensions."
The company's reorganization plan was approved in July by the U.S. Bankruptcy Court in Delaware. It received final approval from the Federal Communications Commission in November.
The announcement Monday ended a four-year process for the company. Its assets were tied up in court while the media industry continued its digital transformation.
In a letter to employees, Eddy Hartenstein, the company's chief executive, said the last four years "have been a challenging period."
"You have been resilient, dedicated to serving the company, our customers and your fellow employees," he said. "You are what sets Tribune apart from our competitors."
The company also announced a seven-member board. The directors include Hartenstein and Peter Liguori, a former chief operating officer of Discovery Communications, who is expected to be named chief executive. Bruce Karsh, a founder of Oaktree Capital Management, which is a major shareholder in the company, also sits on the board, as does Ross Levinsohn, a former interim chief at Yahoo.
The end of the bankruptcy has led to plenty of speculation about who might buy Tribune's newspapers, with names like Rupert Murdoch and David Geffen floated as contenders. Phillips said he was skeptical that Murdoch would be a serious bidder because his company had so much else on its plate.
"I would think they would take a look," said Phillips. "But when it comes to stepping up and making a substantial offer, I would be surprised. They're already splitting off the publishing business from the entertainment business."
He said Geffen, too, would probably not acquire Tribune properties "unless the price is really attractive, because he's not someone who has run a newspaper company previously."
Kushner, who bought the Orange County Register last summer, said he was focused on buying large metropolitan newspapers. He noted that while Tribune newspapers appeared to be profitable, how they would stay profitable was unclear, as it is with many newspapers.
At the Register, Kushner said, he tried to increase revenue by strengthening relationships with subscribers.
For example, he said, the newspaper gave its readers more value by increasing its pages 40 percent in the last year. It also spent $12.4 million sending $100 checks to its subscribers that they could make payable to their favorite local nonprofit groups. He said enhancing a paper's relationship with subscribers would help drive subscriptions and, ultimately, advertising.
"Our basic view is that we add more value," said Kushner. "This is the only path that we can have revenue grow."