Tribune Co., which has changed its name to Tribune Media Co (OTCMKTS:TRBAA), announced today that it has completed the previously announced spinoff of its publishing segment. The division runs the Chicago Tribune and the Los Angeles Times. The company decided to spin off its newspaper segment to protect it against the struggling print advertising business.
Tribune Publishing trades tomorrow
The new company is called Tribune Publishing (NYSE:TPUB) and will begin trading tomorrow on the New York Stock Exchange, reports USA Today. Tribune Media Co. will continue running its 42 television stations. All of Tribune’s shareholders received .25 of a share of Tribune Publishing’s common shares for every share of Tribune they own.
Tribune Publishing starts off with $350 million in debt, according to The New York Times. Of that debt, the greatest majority—$275 million—will be used to pay a one-time dividend to shareholders of Tribune.
The Tribune Co. has been around since 1847 when the first issue of the Chicago Tribune was published. The company grew fast in the 1980s and 1990s, adding more newspapers and TV stations to transform itself into a giant media conglomerate. As the news industry shifts away from newspapers and toward TV and electronic media sources, the newspaper industry as a whole has suffered. Tribune Co. filed for bankruptcy protection in 2008 and emerged from it toward the end of 2012.
Newspaper industry continues spinoff trend
Tribune Media isn’t the only company to spin off its newspaper segment into a separate division. Recently there has been a flurry of separations within the publishing and news industry. News Corp (NASDAQ:NWSA) split off from Twenty-First Century Fox Inc (NASDAQ:FOXA). Time Warner Inc (NYSE:TWC) also spun off its publishing division, Time Inc. (NYSE:TIME).
When News Corp spun off Twenty-First Century Fox, Rupert Murdock granted the newspaper business $2 billion in cash to make the transition go smoothly. On the other hand, Time Inc. was saddled with $1.3 billion in debt when Time Warner spun it off in June.