Rep. Henry Waxman Suggests Tribune Is Looting LA Times Before Proposed Newspaper Spinoff

Rep. Henry Waxman Suggests Tribune Is Looting LA Times Before Proposed Newspaper Spinoff

Democratic congressman from California has been outspoken with concerns about the company’s planned transaction, which also includes the Chicago Tribune

Democratic California Rep. Henry Waxman has sent a second letter to Tribune Co. President and CEO Peter Liguori about its proposed spinoff of the L.A. Times and other newspapers it now owns, expressing heightened concerns about the transaction based on paperwork filed with the Securities and Exchange Commission.

“It appears that you are putting onerous conditions on the Los Angeles Times and other newspapers that could jeopardize their survival as a separate entity, the Tribune Publishing Company,” Waxman wrote. “At a minimum, you appear to be putting the profits of the Tribune Company ahead of the interests of the public in viable local newspapers.”

Also read: Henry Waxman Questions LA Times Spinoff, Concerned It Will Create ‘Corporate Orphan’

Waxman said the spinoff plans would saddle the newspapers, including the Los Angeles Times, with millions of dollars of debt, forcing publishing side to start not just in the red but needing to borrow money immediately to offset costs. He also took issue with the fact that the L.A. Times would be forced to pay rent to stay in the iconic building which has been the paper’s home for 60 years.

“These actions make it appear as if the Tribune Company is looting the Los Angeles Times and other newspapers before the spinoff,” the congressman wrote.

Also read: Tribune Closes Local TV Acquisition to Become Largest Independent Broadcast Group in U.S.

Waxman, whose district includes the westside of Los Angeles, first outlined his concerns to Liguori Dec. 19, shortly after the company announced the intended split. In that letter, the congressman said the newspapers would go into debt solely to pay hundreds of millions of dollars for a cash dividend to the Tribune Co., possibly irreparably damaging the already struggling newspaper group.

Also read: Tribune to Cut Nearly 700 Newspaper Jobs as Part of Restructuring

Waxman requested dozens of documents ahead of a Jan. 15 meeting between staffs to discuss the proposed transaction. Waxman has requested Tribune to provide board communications regarding the future viability of the Los Angeles Times and other newspapers, details on the cash dividend, and information about pension obligations to the eight papers in the proposed Tribune Publishing Co.

Also read: Kathy Thomson Stepping Down as President and COO of Los Angeles Times

Waxman currently serves as the top Democrat on the House Energy and Commerce Committee, which oversees consumer protection and telecommunications among other responsibilities, and he is one of the most powerful rank-and-file members of the Democratic caucus.

 

  • crosspatch

    “At a minimum, you appear to be putting the profits of the Tribune Company ahead of the interests of the public in viable local newspapers.”

    It is not the job, really, of a newspaper to be a charity organization. They have an obligation to their investors not to waste their money. LA will always have a paper and even if the LA Times were not to be “viable” as initially spun off, SOMEONE would buy it. It is just too large of a media market not to have a newspaper. But it isn't the role of the Tribune Company to perform to Waxman's expectations at its own expense. Waxman is just afraid Murdoch will buy it.

    • mrb

      While it's vital to have local papers (although LA Times is a joke,) it does not appear to be Waxman's role to intervene in this. You are probably correct about the Murdoch fear but this objection needs to come from the private sector or an activist group. He seems to have a history of intervening and grandstanding in business issues that are not his role, while doing little about the pressing issues that are in his purview. Also, his staff is awful in the local office. Complacent, rude, smug, ineffective. It's time for fresh representation.