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After 6 months of dating, and tabloid-worthy rumors and speculation not far behind the kind of paparazzi press coverage Paris Hilton and Lindsey Lohan get, Tribune Co. today announced it had settled on a buyer. The newspaper and media giant will be sold to billionaire real estate investor, and local Chicagoan, Sam Zell for approximately $8.2b.

The share price for the purchase will be $34, a premium of approximately 6% over last weeks trading but in line with pricing from September, when Tribune Co. announced it was for sale. That price is less than the average 9.8x multiple of Price to EBIDTA for Tribune’s public competitors.

The transaction will occur in two tender offers, the first for 126m shares will close in the second quarter. The second, for the remaining shares will close in the fourth quarter. The company will borrow the money in two $4.2b increments to buy back the stock.  Merrill Lynch and JP Morgan will finance the deal.

Zell, who recently sold his Equity Office Properties Trust to Blackstone Group for $39b is personally investing $315m and will gain rights to a warrant entitling him to buy 40% of the company.   To reduce the debt load which, including borrowing for the purchase price, will exceed $14b, Zell has announced a plan to sell the Chicago Cubs baseball team at the close of the current baseball season.  It’s also a possibility that Zell will consider selling the LA Times property to Eli Broad and Ron Burkle, the LA-based investors who lost out in their bid for Tribune to Zell.

With Tribune a private company, Zell and his management team, will have a better situation to turn around the company than if it remained public.

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With rumors of mergers and acquisitions still swirling, Tribune Co. today sold the two smallest (by circulation) newspapers in its portfolio to Gannett. The Greenwich Time and the Stamford Advocate have modest readership but are in premium advertising market. (As much as any newpaper ad market could be considered premium in the currently difficult print ad marketplace.

At a sales price of only $73m, the transaction is small for Tribune but it fits with the company’s stated goal of liquidating at least $500m in non-core assets. The sale may or may not help with Tribunes ongoing effort to sell itself as a whole.

The list of potential suitors for the Tribune Co. is starting to read like a supermarket tabloid about celebrity couples.  The Tribune Co which owns a range of media and entertainment properties including the LA Times, Newsday, more than 20 TV stations, the Chicago Cubs, and sizeable investments in Food Network, Career Builder, Topix and others,  has had itself on the market since around September 2006 around which time S&P lowered the company’s credit status to “junk.”  

Since special committee was formed by the Board of Directors to oversee the process, rumors and reports have put Tribune in bed with virtually every private equity company from the Blackstone Group to the Carlyle Group.   Billionaire moguls have also been rumored on the dance card.  Last month the Financial Times reported Rupert Murdoch’s News Corp was interested in taking a substantial minority stake.  The Wall Street Journal separately reported investors Eli Broad and Ronald Burke had submitted a bid.  Now the Chicago Tribune is reporting that Chicago local, and real estate mogul, Sam Zell is trying to structure a deal.

Why is this deal so hard to get done?  The simple answer is some combination of three things Click to Read More

Gannett Co  (NYSE: GCI), the nations largest newspaper company based on circulation volume, reported Q4 earnings.

The company announced net income was up 3% on the quarter.  Earnings were up $10.2m to $353.5m ($1.51/share).  Revenue was up 7.5% to $2.21b.  Both returns beat analyst consensus estimates.

In the rough newpaper ad market, the company had ad revenue up 3.7% but that was partly attributed to an increase in December from an extra week.  USA Today was the best performer with 13% ad growth (8% if adjusted to remove the extra week).

The television station holdings had Q4 revenue of $270.6m, up 30.3%.

More detailed press coverage on Gannett’s finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

New York Times  (NYSE: NYT), reported Q4 earnings.

The company took an impairment charge of $814m to for the declining value of the Boston Globe property.  Inclusive of that charge, for Q4 the times reported a loss of $648m equal to EPS per share of ($4.50) versus $0.43 for the prior year.

Revenue came in at $931m, up from $893.   By division, advertising accounted for $626m and circulation $235. Other divisions provided $70m.   All three categories were up over Q4 of the prior year.

More detailed press coverage on New York Times’ finances can be found at:

Yahoo Finance
Google Finance
Marketwatch

Earlier today, the wire services reported Nintendo had partnered with the Associated Press to provide an online news service through the Wii gaming platform.  Network connected Wii consoles will be able to access a free news channel through an Opera Web Browser.  As part of a 2 year multimedia distribution contract, the free news channel (there are no plans for it to be ad-supported at this time) will provide content from AP in multiple languages including French, English, Spanish and German. Additional Japanese language news will be provided by Goo, a Japanese news company.

The planned interface for the news is a graphic map.  Users will be able to navigate around the map to find regional news, and can zoom in and out to expand focus, all using the Wii’s innovative motion sensing controller.

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“Making up for lost time” and “better late than never” underscore some of Microsoft’s efforts to compete and keep up with Google.    

Given Google’s published mission to organize the world’s information and make it universally accessible and useful, efforts to digitize and index vast libraries is a natural way point on their roadmap.   With efforts over the past year Microsoft has been both catching up and making sure that road is at least a two lane highway.

With a deal widely announced in October, Microsoft partnered with high speed scanning service firm Kirtas Technologies to advance its efforts.  Kirtas’ services allow Microsoft scan as many as 2400 pages per hour.  While October is way back on the calendar from the point of breaking news, the deal, and the ongoing arms race between Microsoft and Google to sign up library/content partnerships makes it as timely as ever – and escalating

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