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Cross-Ownership in the Cross Hairs
In wake of Times Mirror buyout, Tribune Co. to challenge ban on newspaper-TV monopolies
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Business New Haven
4/3/2000
By: Michael C. Bingham
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The Chicago-based Tribune Co. March 14 announced that it would acquire the Los Angeles-based Times Mirror Co. in a deal valued at $5.9 billion. The combined entity becomes a multi-media giant with 22 television stations (including WTIC and WTXX in Hartford), 11 daily newspapers (including the Hartford Courant, Stamford Advocate and Greenwich Time) four radio stations, a strong Internet presence and the Chicago Cubs baseball club. The two companies already owned two of the nation's largest newspapers, Times Mirror's Los Angeles Times and the Tribune's Chicago Tribune.
In the suddenly freewheeling Connecticut media world, news of the deal comes just two weeks after the Canadian Thomson Corp. announced that it would sell all its American newspapers - including the Connecticut Post - in order to concentrate on Internet ventures. Meanwhile, the Trenton, N.J.-based Journal Register Co., owner of the New Haven Register, is looking to raise between $500 million and $750 million from the sale of newspapers in the Midwest in order to pay down debt and concentrate on its papers in the Northeast.
Lost a bit in the shuffle is a 25-year-old Federal Communications Commission rule prohibiting cross-ownership of daily newspapers and televisions station in the same market by a single corporate entity. Having swallowed Times Mirror, the Tribune Co. would in Hartford own the Courant as well as WTXX and WTIC.
That's a violation. However, the rule generously allows the corporate parent a year or until the TV stations' licenses come up for renewal - whichever is longer - to divest itself of one or the other. The Hartford stations' FCC licenses aren't due to expire until 2006.
However, some industry observers don't think it will come to that. Tribune Co. and newspaper-industry lobbyists are pushing to change the rule both in Congress and at the FCC. And Tribune Co. officials say they are prepared to fight the matter in court on First Amendment grounds, if need be.
The company has already sued the FCC in a cross-ownership dispute arising from its purchase of a television station in Ft. Lauderdale, Fla.
Last year the FCC eased its rules regarding broadcast ownership, making possible deals such as Viacom's proposed $43 billion buyout of CBS. That leaves only newspaper publishers with their hands tied by the FCC. And with the largest of them on the make to create vertically integrated, multi-media behemoths, regulators and lawmakers in Washington are certain to feel the heat.
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