We’ve all been waiting for the papers — with the L.A. Times and Chicago Tribune the two flagships — to be sold off, quite possibly to the Koch brothers. (And they still might be.) So this morning’s news that they would instead be spun off into a separate company — to be called Tribune Publishing Co. — was at least a bit of a curve ball.
But that said, the move very much fits into the broader trend of diversified media companies shedding their print and print-originating holdings. In 2008, my old employer, Belo, split into newspaper and broadcast halves, with the TV side taking on the company’s debt. (The TV side is now being sold to Gannett, which is leaning more heavily toward broadcast these days.) Media General shuffled its newspapers off to Warren Buffett to focus on TV. Time Inc.’s magazines are being sent on their way. News Corp. got to keep the name in its just-executed split, but it lost the non-newspaper moneymakers.
Needless to say, separating print brands from their cross-subsidy-providing brethren makes it even more urgent that their business models get righted quickly. (It’s unclear what sort of a balance sheet the new Tribune publishing company would have at birth — what debts and financial assets it would start life with.)
One noteworthy item in the Tribune split: The company’s equity interests in CareerBuilder and Classified Ventures will remain with the broadcast side and not travel with the newspapers. CareerBuilder and CV (which owns Cars.com) represent much of what the newspaper industry has left to show for its once-mighty classified ad business. Both were started as joint ventures of newspaper companies and represented their strongest response to the Craigslists, Monster.coms, and eBays of the world.
David Carr reports that CareerBuilder and CV’s publishing agreements with Tribune newspapers will remain in place after the spinoff, and I’m sure there are good business reasons for the decision. But still — that Tribune’s ownership share of those assets won’t move with the newspapers seems almost a little cruel, doesn’t it?