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The Chicago Tribune Phil Rosenthal Media Column: Gannett to Buy WATL in $180 Million Deal

Posted on: Tuesday, 6 June 2006, 09:00 CDT

By Phil Rosenthal, Chicago Tribune

Jun. 6--Tribune Co. said Monday that it is selling Atlanta's WATL-TV to Gannett Co. for $180 million, its first transaction since announcing last week that it would unload at least $500 million in assets to help fund a major share-repurchase effort.

WATL Vice President and General Manager Steve Carver, whose responsibilities within Tribune include oversight of Chicago's WGN-AM 720, said he will remain at the Atlanta TV station through the transition to its new owners, which needs regulatory approval. A Tribune spokesman said the Chicago-based media concern hopes he will stay with the company.

"We'll have conversations on that stuff going forward," said Carver, 51, who was seen as an up-and-coming manager within Tribune soon after joining WGN-AM from WBBM-AM 780 in 1998. "I think the company has expressed an interest, but we'll see. That's down the road and not necessarily for today. ... The focus today is on the people here in Atlanta."

Carver was regional vice president and general manager at WGN-AM when he left to run the Atlanta TV station three years ago. WGN-AM Vice President and General Manager Tom Langmyer reports to him, though it's unclear what happens after the sale is completed, expected in two to six months.

"This [sale] reflects an important aspect of the stock-repurchase strategy that we communicated last week," Tribune Chairman and Chief Executive Dennis FitzSimons said in a statement. "Our goal is to generate additional shareholder value through improved operating performance, asset sales and disciplined repayment of debt over the next several years. The sale of WATL further demonstrates our commitment to delivering value for shareholders."

The company's plan to buy back 75 million shares at a cost of at least $2 billion includes borrowing money and cutting $200 million in costs over the next two years in addition the sale of some assets. Tribune properties include the Chicago Tribune.

Asked in an interview last week what constitutes core company assets, FitzSimons described Tribune as "a major-market media company." The sale of WATL takes Tribune out of the nation's No. 9 TV market, where it bought a minority interest in the station in 1995 and took full ownership in 2000.

The acquisition will give Gannett two stations in Atlanta. It owns and operates WXIA-TV, an NBC affiliate.

"Atlanta is a terrific TV community that is a perfect location for a duopoly such as this," Roger Ogden, president and CEO of Gannett Broadcasting, said in a statement.

WATL's audience share of the Atlanta market has been on the decline recently, slipping to 3.7 percent last year from 5.2 percent in 2002, according to Tribune Co. annual reports.

It is one of three Tribune-owned stations that were affiliates of The WB Network but will not be affiliated with The CW, a joint venture of CBS Corp. and Time Warner's Warner Bros. that's set to replace The WB and UPN when the mini-networks shut down in September. Instead, the trio will be aligned with News Corp.'s rival My Network TV.

"When the CW announcement came out ... that got outside parties thinking out loud," Carver said. "There were a lot of inquiries [about WATL] made to Tribune over the last couple of months. ... Tribune wasn't looking to sell at the time, but people call and the price turns out to be right, and a deal gets put together."

philrosenthal@tribune.com

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Copyright (c) 2006, Chicago Tribune

Distributed by Knight Ridder/Tribune Business News.

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Source: Chicago Tribune

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