It is just as well Hallmark doesn't make a greeting card for all occasions. "Roses are red/We're feeling blue/You're costing us money/Here's what to do" doesn't really cut it when a company's second-largest shareholder bloc wants to register its dissatisfaction.
The unhappiness of the Chandler family, heir to the Times Mirror media fortune, with Tribune Co., heir to Times Mirror's headaches, was spelled out in a letter to the company's board Wednesday, bringing the long-simmering feud between the two to a boil.
It's no longer necessary to read between the lines.
The Chandlers minced no words in arguing against the board-approved buyback of stock with borrowed cash, and their shares are about the only thing they don't want to sell. Split the company's broadcasting and newspaper businesses, they say; if necessary, put the whole company on the block.
Calling Tribune's actions and approaches "fundamentally flawed," "hasty and ill-informed" and "disastrous" are just some of the letter's highlights. "This projected turnaround is hard to believe" also fairly leaps off the page.
Not that Tribune Chairman and Chief Executive Dennis FitzSimons seemed all that impressed. In a memo to employees, sent almost eight hours after the Chandlers filed their letter with the Securities and Exchange Commission, he flatly said, "Many of the assertions in the letter are inaccurate."
What's indisputable is these have been tough times for Tribune, whose portfolio includes this newspaper. For one thing, the acquisition of Times Mirror, owner of the Los Angeles Times among other properties, was supposed to create synergy windfalls. But that hasn't happened, according to some analysts. Tribune did, however, pick up an unexpected $1 billion tax bill from an old Times Mirror dispute with the IRS, as well as a circulation scandal at New York's Newsday.
"You have to look at the comments [from the Chandlers] with a very modest grain of salt," said Barry Lucas, senior vice president and analyst at Gabelli & Co. "If you were charitable, you could say the comments on one hand were disingenuous. If you were a little bit more cynical, I think you would say it takes a lot of chutzpah for the Chandlers, in particular, to say that.
"They say that Tribune has been a laggard [compared with the rest of the sector], and it's been terrible and etc., etc., etc. Well, two of your [old Times Mirror] properties--excuse me--have been the boat anchors around [Tribune's] neck here, in the L.A. Times and Newsday. But again that doesn't change the fact that Tribune management owns them, and something should have been done."
Perhaps the Chandlers are nostalgic for the days when they needed but lift a finger for things to move their way. But if they still wanted to run a media company, maybe they shouldn't have sold the one they had to Tribune for $8.3 billion.
Now they're flexing all the muscle they can muster to budge Tribune's stock price, if not FitzSimons and the board. FitzSimons is charging ahead with the buyback, convinced he's Eisenhower not Custer.
"Dennis is on the hot seat," Lucas said. "Look, he did not do the deal with Times Mirror. ... But you're dealt that hand and you play it, and I think there are certainly things that could have been done better over the last two years."
Because the Chandlers no longer "directly control their prize property, the L.A. Times," said James Goss, a media analyst with Barrington Research, "they're probably more focused on pure and simple financial gains, which is reasonable for an investor, but it's not the same as when they owned Times Mirror and there was pride of ownership."
That's not to say they are wrong about the value of Tribune in pieces. The Chicago Cubs are an asset that could very well bring an irrational price. The Los Angeles Times is a prestige property, helpfully located in a community where the rich are accustomed to paying a premium to impress.
Should Tribune put its TV stations on the market, there will be no shortage of buyers, said Fred Kalil, vice president of Kalil & Co., a radio and TV broker.
"Are they attractive to a lot of people? Definitely," Kalil said. "Eighty percent of all the broadcasters and buyers who are looking at TV would want to look at that. ... You'd have hedge funds, you'd have private [equity buyers], you'd have public companies. You name it. Everyone would take a peek at it."
But beyond lifting Tribune's share price 89 cents Wednesday and opening the floodgates of speculation, what have the Chandlers accomplished with their poison-pen note?
"To the extent that headlines grab attention and it stirs the pot a little bit more, maybe it gets management a little bit more focused," Lucas said. "Maybe it gets some of the private-equity guys a little bit more focused, not that they necessarily needed it.
"The best case for [the Chandlers] is to maybe round up some private-equity players ... who potentially could act together and maybe make a hostile. That would be one way of seeing an outcome."
Tell Hallmark to get ready:
"Red is a rose/Green is clover/You should have listened/We're taking you over."
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