As the Federal Communications Commission launches its re-examination of media-ownership rules, Tribune Co. is already facing a breakup six years after its purchase of Times-Mirror and the cross-ownership violations it created in the New York; Los Angeles; and Hartford, Conn., markets.
Still not decided
When Tribune Co. bought Times-Mirror, it did a bit of gambling. Though FCC rules banned newspapers and broadcasters from licensing new cross ownerships, Tribune bet the rules would change by the time the license of KTLA-TV in Los Angeles, WPIX-TV in New York and its Harford station, WTIC-TV, came up for renewal. (Tribune later acquired a second Hartford station, then-struggling WTXX-TV, which it operated under a management agreement via an FCC waiver.) The Times-Mirror purchase included newspapers in those markets, namely the Los Angeles Times, the Hartford Courant and Newsday.
It has turned out that the cross-ownership issue isn't yet decided, and the Tribune's licenses for TV stations are now starting to come due. The first for Los Angeles station KTLA-TV has to be filed early next month and the current FCC rules say that license can't be granted while the Tribune still owns the L.A. Times.
Tribune Co. will seek a waiver of the cross-ownership rules to allow it to keep both the Los Angeles newspaper and TV station. The company is expected to have the backing of FCC Chairman Kevin Martin, who has been an outspoken critic of the cross-ownership rule.
Shaun Sheehan, Tribune Co.'s VP-Washington Affairs, confirmed plans to seek the waiver, saying that the rule hangs "by the thinnest of threads" because it was adopted in 1975, well before growth of competing media platforms such as cable.
The FCC is re-examining its media-ownership rules as a result of an appellate-court decision. And the court, while generally rejecting the FCC's first ownership rules, indicated some support for removing the cross-ownership rule.
Watchdogs ready to fight
Consumer groups concerned about growing media concentration are gearing up for a fight that includes attempts to thwart the Tribune Co.'s efforts to seek a waiver.
"The basis for which waivers are granted is financial hardship and difficulty of effectuating a sale," said Andy Schwartzman, director of the Media Access Project, a public-interest law firm that successfully sought to overturn the FCC's last attempt to rewrite media rules. "They've had five or six years to do something with the Los Angeles Times. It doesn't make any sense.
"No one is going to say that any of their properties are distressed, with the possible exception of one Hartford television station, and no one is going to say they don't have ready buyers. People are lining up to buy these properties," he said.
Mr. Schwartzman said consumer groups would likely sue to try to overturn any FCC wavier grant.
Mark Cooper, research director for the Consumer Federation of America, also believes a lawsuit against any waiver that is granted is inevitable. "I am certain that many in the public interest community will oppose the waiver," he said. "No doubt someone will sue."