Tribune Takes the Lead

Tribune's (TRB Quote) restructuring could pressure other old-media names to follow suit.

The Chicago-based company, one of the oldest media empires in the U.S., announced plans Tuesday to buy back 25% of its outstanding common shares, shed $500 million in noncore assets and cut expenses by $200 million.

Tribune said it wants to expand existing interactive businesses and invest in building national interactive networks. The company adds that it will not shed assets in its top three markets, though divestitures "could include certain noncore broadcasting and publishing assets, as well as real estate and securities held for investment," Tribune said.

The refocusing at Tribune could serve as a call to action at big newspaper and local TV station owners like Gannett (GCI Quote), Belo(BLC Quote) and New York Times Co. (NYT Quote). All have failed to impress Wall Street of late, with shares losing 20% to 30% of their value during the last 12 months.

The Tribune move comes as investors have criticized management at many media firms for their failure to capitalize on the growth of Internet advertising and on their perceived unaccountability to shareholders.

"You have to give [Chairman] Dennis FitzSimons a thumbs-up on this one," Benchmark's Ed Atorino says. He commends Tribune for making a "pre-emptive strike" rather than waiting, as did Knight Ridder (KRI Quote), for an activist shareholder to get the upper hand.

Knight Ridder, owner of the Miami Herald and other large publications, was recently sold to McClatchy(MNI Quote) for $6.5 billion. The Sacramento Bee publisher is, in turn, selling several newspapers related to that transaction.

Knight Ridder isn't the only media firm in investors' crosshairs of late. Family-controlled New York Times Co. recently faced down shareholder ire in the form of Morgan Stanley's (MWD Quote) investment group, which wanted to see better results and a reconfiguration of its assets to remedy poor performance.