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.”
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.
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.
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.
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.