L.A. Times to lay off 300 and Cuts Local News Section

By Martin Zimmerman, Los Angeles Times

L.A. Times to lay off 300, consolidate sections

As ad revenue drops, stand-alone California pages will merge into main news, meaning one daily press run can be eliminated. Changes will begin the week of March 2.

The Los Angeles Times announced plans Friday to lay off 300 people -- including 70 newsroom workers -- and fold its California section into the main news pages.The moves are the latest efforts by the West's largest paper to cope with the steep loss of advertising revenue caused by the recession and the flight of advertisers to online media outlets.

"We're trying to get ahead of what we see as a very tough year ahead of us," Publisher Eddy Hartenstein said. "We're no different from any other company in any other sector that I know of."Beginning the week of March 2, The Times will publish four daily sections, Hartenstein said in a memo to staffers.The main news section will carry state and local news as well as national and international coverage. The opinion pages will remain in main news.

The consolidation, Hartenstein said, "will combine the stories and reporting of our two most widely read print sections into one cohesive section."The move also will allow the paper to make the Calendar section "more news-driven," Hartenstein said, giving it later deadlines and allowing the publication of overnight reviews of concerts, plays and other events.

The Business section, meanwhile, will revive its Company Town feature to strengthen coverage of the economic side of Hollywood. Obituaries and the daily weather report, now found in the California section, will move to Business. Classified advertising, formerly a stand-alone section, will move to the back of Sports.

The feature section lineup will remain the same, with Health on Monday, Food on Wednesday, Home on Saturday and Image, Travel and Arts & Books on Sunday. The Sunday lineup will also be unchanged, except for the consolidation of California into main news.

The action will streamline The Times' daily printing operation and save money by eliminating one press run a day, Hartenstein said. Combining sections has become an increasingly common tactic for newspapers looking to cut costs, but it can be unpopular with readers.

The San Jose Mercury News combined its local and national sections in 2005, but reversed course two months later because of negative reaction, said Bert Robinson, the paper's assistant managing editor for news. Among other things, he said, couples complained it was harder to share the paper.

More recently, the Chicago Tribune and Orange County Register decided to restore their stand-alone business sections in response to reader complaints, although the Register will still fold business into another section three days a week.

The layoffs announced Friday at The Times are the fourth round of staff cutbacks at the paper in the last 12 months and represent an 11% reduction in its current newsroom staff of around 650. At its peak in 2001, The Times newsroom had 1,200 employees.

In remarks to the staff, Editor Russ Stanton said it was not clear yet when the layoffs would occur. One hold-up: The Times' parent company, Tribune Co., is operating under Chapter 11 bankruptcy protection, and the proposed severance plan for laid-off workers still needs to be approved by the bankruptcy court.martin.

zimmerman@latimes.com

Los Angeles Times staff writer Meg James contributed to this report.

Disney's ABC Television Group to cut 5% of workforce

By Meg James
Los Angeles Times

The latest media company to make cutbacks as advertising falls says it will eliminate 400 jobs by letting go 200 employees and leaving another 200 positions unfilled.

Walt Disney Co.'s ABC television division, pressured by a downturn in the economy that is depressing advertiser spending, said Thursday that it was trimming its workforce by 5%, becoming the latest media company to make cutbacks.

The Burbank-based television group said it would eliminate 400 jobs by letting go 200 employees and leaving another 200 positions unfilled. The cuts are to be spread across all of Disney's television operations, including the flagship ABC broadcast network, ABC News and the cable networks Disney Channel, ABC Family and SoapNet.

"Change is never easy and becomes even harder to embrace during times of turbulence and uncertainty," Anne Sweeney, president of the Disney/ABC Television Group, said in an e-mail to staff members. "After months of making hard decisions across our businesses to help us adjust to a weakening economy, we're now faced with the harsh reality of having to eliminate jobs in some areas.

Disney's sports network ESPN said this week that it would shed about 200 jobs this year. The Bristol, Conn.-unit also is freezing the salaries of senior executives.

The layoffs come just two weeks after Disney disclosed that it awarded Chief Executive Robert Iger $30.6 million in compensation in 2008, an increase of 11% from 2007. The boost came despite a 5.5% drop in net income during the entertainment giant's last fiscal year as consumers reined in spending, reducing profit at its theme parks as well as its television stations and networks that rely on advertising. Disney's revenue climbed 7% to $37.8 billion.


Most Disney divisions are cutting back as the economy worsens. Last week, the company offered voluntary buyout packages to about 600 executives at its domestic theme park and resort divisions. Those executives have until Feb. 6 to decide whether to leave with severance or risk becoming part of a round of layoffs.

The number of employees let go at the Disney-ABC Television Group represent less than 3% of its nearly 7,000 workers, or 5% including the vacant positions. Last November, ABC asked its show producers to trim their budgets by 2% in a bid to reduce production costs.

On Thursday, ABC News lost 37 employees out of a staff of about 1,300. The cuts were made throughout the news division, hitting the political unit, news magazines, ABC News Now and other departments. No on-air talent was fired, but those let go included production assistants and some senior producers.

ABC News President David Westin had already been keeping a tight grip on spending, paring about 35 positions annually in recent years from his division. In October, he asked news executives to fly "one grade below what they're entitled to" and to "stay in 'B' level hotels."More cuts at ABC Entertainment are expected.

Last week, ABC merged its separate network and TV production operations into one unit under ABC Entertainment President Stephen McPherson, who now must integrate and reshape the staff that oversees the production of prime-time comedies and dramas.Media companies that depend on advertising have been slammed during the last six months.

Time Warner Inc.'s Warner Bros. Entertainment eliminated about 600 people this month, and the company's AOL unit said this week that it would cut an additional 700 jobs.

Radio giant Clear Channel Communications Inc. slashed 1,850 jobs.Last month.

Viacom Inc., which owns MTV Networks and Paramount Pictures, eliminated 850 positions.

NBC Universal cut several hundred jobs to save $500 million this year.

meg.james@latimes.com

LA Times Staff writers Dawn C. Chmielewski and Matea Gold contributed to this report.

Movie Production Incentives Are Said to Help New York

By MICHAEL CIEPLY
THE NEW YORK TIMES

LOS ANGELES — Costly state incentives to lure film production and jobs may be paying off, at least in New York.

A study of New York’s tax breaks for movie and television production suggested that a 30 percent credit offered by the state, with an additional 5 percent offered by New York City, could be expected to keep or create about 19,500 jobs while yielding $404 million in tax revenue, at a cost of $215 million in credits.

But the benefits were heavily weighted toward New York City, which attracted by far the largest share of production with New York-based television series like “Ugly Betty” and “30 Rock” and movies like “Notorious,” a rap music drama released by Fox Searchlight this month. The city collects about 6.4 times as much in taxes from film as it spends on incentives, the study said.
The study, completed last week, was conducted by the accounting firm Ernst & Young for both the Motion Picture Association of America and the film office of New York State.

In recent years, states like New York, Michigan and Louisiana have used aggressive subsidies to compete for film jobs, but comprehensive reviews of their impact have been few and far between.

In 2005, a study by the chief economist of Louisiana’s legislative fiscal office said that state’s incentives, among the country’s highest, created only a modest number of jobs and did not generate enough tax revenue to offset their costs.

New York State’s subsidies were raised from 10 percent of qualified expenditures to 30 percent in April 2008, in a move to stem the flow of productions to competing states, including Connecticut and Massachusetts.

In its assessment, Ernst & Young noted that New York State’s film office received 100 applications for movie and television shoots from April 23, when the new subsidy became effective, until the end of the year. Spending on those projects was estimated at $1.8 billion, up from $940 million in all of 2007.

Applying the new 30 percent subsidy rate and current tax rates to the level of activity that occurred in 2007, Ernst & Young figured that the state would have spent $184.4 million, while getting $208.7 million back in taxes.

New York City, meanwhile, would get $195.3 million from a tax credit expenditure of only $30.7 million.

Ernst & Young said it figured about 7,000 jobs were gained or retained in direct film employment, while an additional 12,500 came from related economic activity, not counting any increase in tourism spending.

If the subsidies are indeed working for New York, that can only be bad news for California, the film production capital, which has seen jobs and income flee and which offers no major subsidies.
Last year, according to FilmLA, which tracks location shoots in Los Angeles, days of feature film production outside of studio walls fell 14 percent, to 7,043 days, the lowest level since the count began in 1993.

Fresh cast in place at Screen Actors Guild

By Richard Verrier

Doug Allen is ousted as executive director, improving the odds of a new contract.

The prospect of a new contract for Hollywood's film and TV actors brightenedMonday after the Screen Actors Guild board appointed a new negotiating team and ousted the union's executive director.In a dramatic shake-up of the union's leadership, the board tapped former SAG General Counsel David White as the guild's interim executive director after firing Doug Allen, citing a leadership crisis that has paralyzed Hollywood's largest actors union.

For now, Allen's job will be split in two. As part of the shake-up, John T. McGuire, a senior guild advisor, will take over Allen's role as chief contract negotiator and is expected to move quickly to jump-start stalled talks with the studios.In addition, the union's negotiating committee has been replaced by a task force appointed by the board, which will work to secure a TV/theatrical contract that can be sent to members with a "positive recommendation."The actors have been working without a contract since June.

Allen's firing marks a setback for the leadership of SAG President Alan Rosenberg, who had staunchly backed his executive director as a stalwart unionist. He warned that ousting Allen would trigger a civil war.But the board, which used to be controlled by Rosenberg's backers, is now in the hands of directors who have been at odds with the union's strategy and tactics."These much needed changes will allow SAG to chart a new course," the board said in a statement.

A majority of directors from the 71-member board said they had delivered a "written assent" document to SAG headquarters authorizing the move to terminate Allen as national executive director and to replace him with White. The new leader is expected to start his job as early as today.

Matt Damon was among several high-profile SAG members who welcomed the changes."I feel confident that with this move we can get a livable deal soon and start repairing the damage that's been done," Damon said.

The new negotiating team is expected to reach out to the major Hollywood studios in short order, seeking a contract modeled on those secured by three other talent guilds. At the same time, the new negotiators will need to prove to the union's membership that the contract is better than the studios' previous "final offer," which was very unpopular.Allen's ouster comes two years after he was hired. The union will pay him about $500,000 to buy out his contract, which had a year remaining on it.In a farewell letter to staff, Allen made no apologies for his record, which was marked by a series of clashes with board members and the smaller actors union, the American Federation of Television and Radio Artists."I am proud of my record," he wrote. "I wish the Screen Actors Guild and its members success and I have been honored to serve them."The action underscores the ongoing tumult at the actors union. White is SAG's fourth executive director in just four years.

Allen's ouster was widely expected, coming just two weeks after the board majority attempted to fire him but was filibustered by Allen's supporters during a 28-hour meeting.The board members who rebelled against Allen represent a coalition of so-called moderates who have accused him of mishandling negotiations and dividing the 120,000-member union.

Ned Vaughn, spokesman for the Unite for Strength moderate group, said, "This is a crucial chance for SAG to regroup and focus on what matters most: getting a TV/theatrical contract that the board recommends, successfully negotiating the guild's other contracts and improving our strategic relationships to benefit our members."

A Rhodes scholar, White, 40, served as SAG's general counsel from 2002 to 2006. He left the guild to co-found a consulting company. In contrast to Allen, who had a confrontational and sometimes abrasive style of leadership, White has a reputation for being low-key and conciliatory, an approach that will be sorely tested as he faces a sharply divided union.

Although he was praised by Rosenberg when he resigned in 2006, White was not popular with some of the guild president's supporters. They perceived him as too close to former Executive Director Bob Pisano, who quit after a series of clashes with the board.One of White's top priorities will be to find a way to merge with AFTRA, which has been on the agenda of new directors in the past.

McGuire is a 40-year veteran staffer for the actors guild who has negotiated more than 30 contracts. He is "held in enormous esteem throughout the industry and the labor movement," the board members said.richard.verrier@latimes.com

Black Monday for Workers

By Daniel Politi- Slate
Slate is owned by the Washington Post Co.

It was a depressing Monday for tens of thousands of workers as several big U.S. companies announced massive job cuts that illustrate how the Great Recession is hitting almost every corner of the labor market. The Washington Post says U.S. employers cut more than 55,000 jobs in what it calls "a staggering one-day toll."

The New York Times reports that more than 75,000 jobs around the world disappeared yesterday. The Los Angeles Times adds it all up and notes that 187,550 jobs have been slashed so far this month, which is more than double the number in January of last year. And the pain is far from over. USA Today highlights that "far more job cuts are likely" in the near future, and some economists expect 3 million people will lose their jobs this year.

The Wall Street Journal leads its world-wide newsbox with the Senate confirming Timothy Geithner as Treasury secretary with a 60-34 vote. Now that Geithner is in place, the Obama administration is expected to quickly outline its plan to prop up the financial system, which is expected to have a strong focus on helping homeowners. As early as today, Geithner is expected to announce new rules to limit the influence of lobbyists and special interests in determining who will get help from Uncle Sam.

Job losses are nothing new as companies have been laying off workers for more than a year. But these losses were once concentrated in companies related to the housing and finance industries. "Now the ax is falling across large swaths of manufacturing, retailing and information technology," points out the NYT.

The WP notes that 22 of the 30 companies that make up the Dow Jones industrial average have cut jobs since October. No other company cut more positions yesterday than Caterpillar, which announced that 15,000 jobs would be eliminated by the end of this week and 5,000 more by the end of the first quarter. Among the other companies that announced job cuts were Sprint Nextel, which shed 8,000; Home Depot, which cut 7,000; and Texas Instruments, which made 3,400 positions disappear.

And that's only part of the equation. USAT points out that while the huge numbers from big firms may hog the headlines, smaller companies are also hurting and many are also resorting to layoffs in order to stay afloat. Indeed, in a front-page story about the layoff woes at a tile factory in Ohio, the WSJ notes that "tiny firms … have an outsized role in employment." More than half of private-sector workers are employed by companies that have fewer than 500 employees.

The new round of job cuts increased the pressure on Washington to pass the economic stimulus package. "These are not just numbers on a page," President Obama said as he urged lawmakers to act quickly. "These are working men and women whose lives have been disrupted. We owe it to each of them, and to every single American, to act with a sense of urgency and common purpose." But it's becoming increasingly unclear whether even a massive stimulus would be enough to get companies to start hiring.

Economists estimate that the stimulus package would save or create somewhere around 3 to 4 million jobs within the next two years. But, as the LAT points out, 2.6 million jobs were slashed last year, and 2 million more are expected to go the same way during the first six months of the year. The package "is as much psychological, to get people to think that even if we're in a recession, it's going to be temporary so I don't have to lay people off," an economist tells the LAT.

The NYT also notes that even if business does improve in the next few months, it's unlikely that companies will rush to rehire workers because layoffs often spur companies to restructure their business models. "There is nothing in the economic tea leaves that suggest someone is going to be hiring," one economist tells the WP, "every aspect of this economy is in a free-fall."

Amidst all the depressing economic developments, there was a bit of good news from the unlikeliest of places: housing. The WSJ goes high with new figures that show U.S. home sales increased 6.5 percent from November, representing the biggest one-month jump in almost seven years. But no one thinks this means the market is headed for a comeback since it seems clear that buyers are taking the plunge largely due to the sharp decline in prices as sales of foreclosed homes were partly responsible for this surge. In all, 45 percent of homes sold in December were characterized as "distressed sales."

The recession may be in full swing, but that doesn't mean companies aren't willing to shell out as much as $3 million for 30 seconds of airtime during this year's Super Bowl, reports the LAT. Viewers will even be able to watch 2.5 minutes of commercials with special 3-D glasses. "There is no platform anywhere in the world that is as effective as this one," said Jeffrey Katzenberg, chief executive of DreamWorks Animation. "The Super Bowl is the single greatest shared American event."

But TV advertising on any regular old day is drying up. The WP's Paul Farhi points out that TV viewers in prime time are being subjected to an unusual number of infomercials. "It won't make most economists' radar screens," writes Farhi, "but the rise of such ads might be a leading economic indicator." As the price of airtime continues to plummet now that banks, automakers, and car dealers are cutting back, viewers are getting used to seeing the likes of Vince Offer of ShamWow fame.

If you're looking to charter a private jet for the Super Bowl weekend, there are still plenty available, notes the NYT. "It's sure not 2008 any more," the chief executive officer of Jets.com said.

The Era Of Not Getting It

Arianna Huffington:The Era of Not Getting It: The Marie Antoinettes of the Meltdown

Tony Blankley nailed it on when he said that far too many Wall Street CEOs "have been studying at the Marie Antoinette School of Public Presentation." Among those following in the footsteps of the tone deaf queen and her "let them eat cake" is former Merrill Lynch CEO John Thain, the poster child for the modern era of Not Getting It -- with his $1.2 million office makeover while preparing to lay off thousands.

But Thain is not alone. Execs at Citigroup, Wells Fargo, and State Street have also shown themselves to be tone deaf. So has Barney Frank who secured bailout money for a home state bank that had been accused of poor lending practices and that made Marie Antoinette moves such as providing a Porsche SUV for executives to use.

Not Getting It: There is no substitute.

There is plenty of debate about what President Obama's stimulus bill should look like -- as well there should be, given all that is at stake. But there is a growing consensus that the guiding principle in that debate should be Obama's call for a "new era of responsibility."

Helping fuel that consensus is the saga of the rise and fall of former Merrill Lynch CEO John Thain, the poster child for the era of irresponsibility. The condemnation of his behavior is completely bipartisan (although we haven't heard yet what John McCain thinks of one of his biggest fundrasing bundlers).

On this week's Left, Right, and Center, my conservative pal Tony Blankley made the perfect comparison: "Thain and these CEOs have been studying at the Marie Antoinette School of Public Presentation," he said. "The crassness and the stupidity are stunning... They ought to be boiled in oil."

Marie Antoinette and her "let them eat cake" became the symbol of Not Getting It -- of not realizing, until it was too late, that a new era had begun. And just like Marie Antoinette, Thain didn't get it, even as Bank of America CEO Kenneth Lewis was leading him to the corporate guillotine.

In fact, Thain had such a run of not getting it that TPM was able to compile a top ten list of his greatest moments.

The pinnacle of Thain's tone deafness, of course, was his over-the-top makeover of his office in early 2008, just as Merrill Lynch was already hemorrhaging money and preparing to lay off thousands of workers. So to soften the blow (on himself), he spent $1.2 million redecorating. Lowlights include $87,000 for an area rug, and $1,400 for a trashcan.

But Thain was far from done with not getting it. Cut to October 2008. Merrill Lynch, after teetering on the brink of failure during September, has just been acquired by Bank of America, in a deal brokered by the government and partially financed by taxpayers. Sleeping through this wakeup call, Thain decides that he deserves a $30 million to $40 million bonus. That figure wasn't received very well, so Thain, chastened, lowered the number to $10 million. In the end he received an appropriate bonus: $0. And then, as the New York Times put it, "he later denied having asked for one" at all.

He was not, unfortunately, stopped from ramming through big bonuses for Merrill Lynch executives -- just days before the taxpayer-financed merger with Bank of America became official. Though bonuses are usually given out in January, in December Thain handed out nearly $4 billion to Merrill employees. New York Attorney General Andrew Cuomo is investigating.

Which brings us to the miserable job he did at Merrill, for which he wanted to so lavishly reward himself. Under his misguided guidance, Merrill Lynch lost $27 billion in 2008. What's more, in late September 2008, as the Merrill Lynch-Bank of America merger was announced, and the world's financial system stood on the verge of collapse, Merrill's traders, as the Times put it, "began buying risky mortgage assets, thinking that the market had bottomed out... Merrill also began to run up losses on equity derivatives and other instruments."

Let me repeat that: in late September, Merrill "began buying risky mortgage assets."

The result? Merrill Lynch lost $15.3 billion in the fourth quarter of 2008 -- a loss so great Bank of America had to get an extra $20 billion from taxpayers to complete the takeover.

In retrospect, it's too bad Thain didn't spend all his time redecorating his office, because any time he spent making business decisions turned out to be very costly to the country. Even scarier, as a big McCain backer, Thain was rumored to be headed to an administration job had McCain won. At least we dodged one Thain bullet, even if we're on the hook for 20 billion others.

As one insider told the Wall Street Journal, Thain "didn't really have a good grasp of what was going on." But this didn't stop him from winning the prize as America's highest paid CEO in 2007, raking in a package worth around $83 million.

Clearly, something is wrong with the process by which executives rise to the top on Wall Street. There's been a lot of focus on how the failures of unregulated markets led to our current structural problems, but too little on how the market system has failed in the way it rewards and penalizes executives. As Treasury Secretary-designate Tim Geithner said: "Excessive executive compensation that provides inappropriate incentives has played a role in exacerbating the financial crisis."

But this is about more than a few rotten apples. And the Era of Not Getting It is not yet behind us. Nor is it limited to one side of the aisle. The Wall Street Journal reports that last month Democratic Rep. Barney Frank, Chairman of the House Financial Services Committee, secured a $12 million TARP payment to the OneUnited Bank in Boston. OneUnited was an unlikely candidate for bailout money, having been accused of poor lending practices and Marie Antoinette moves such as providing a Porsche SUV for bank executives to use. Not Getting It: There is no substitute.

Others Not Getting It include:

Gateway Financial Holdings executives Ben Berry and David Twiddy, who received nearly $1 million in bonuses on the same day their bank received $80 million in bailout money.

Wells Fargo and State Street. Both financial institutions received bailout money ($25 billion for Wells Fargo, $2 billion for State Street), then turned around and increased the amount of money they spent lobbying the government in the last quarter of '08. Not a bad deal: we give them our money, which they use to pay lobbyists in an effort to get more of our money.

Citigroup, which received $45 billion in government bailout funds, and is about to take delivery on a new $50 million corporate jet that features a "plush interior with leather seats, sofas and a customizable entertainment center," as well as advanced temperature monitoring that contributes to a more comfortable passenger experience. Let them eat cake... while sitting on plush leather sofas!

In his Inaugural address, Obama defined what the New Era of Responsibility would entail: "A recognition, on the part of every American, that we have duties to ourselves, our nation, and the world."

Last week, there were steps taken that will encourage adherence to those duties, and make it harder for those that still don't get it. Senators Johnny Isakson and Kent Conrad introduced a bill that would create a seven-person Financial Markets Commission that would establish how the crisis started and how to avoid another one in the future. The GAO called for increased oversight of the bailout. And the Obama administration announced it would make a series of rule changes that will increase oversight for hedge funds, mortgage brokers and ratings agencies.

It's a start -- and will hopefully put us on the path to throwing the Marie Antoinettes of the Meltdown out of their Wall Street Palaces and tossing the Era of Not Getting It into the trashcan. One that costs considerably less than $1,400.

Company ExecutivesView top company executives and access biographies and salary info.www.Hoovers.com/Executives

Americans for Hilda Solis as Secretary of Labor

Hi All,

As per the suggestion of Tula Connell, AFL-CIO Managing Editor, I've created the Facebook Group:

"Americans for Hilda Solis as Secretary of Labor"

http://www.facebook.com/group.php?gid=47640477946

We support a swift Senate confirmation of Hilda Solis as Secretary of Labor.The mission of the Department of Labor is to foster and promote the welfare of U.S. employees and retirees by improving their working conditions and protecting their benefits, helping employers find workers and strengthening free collective bargaining. We believe Hilda Solis is the best choice to lead and inspire the 16,600 Department of Labor employees in support of the rights of working Americans.

The U.S. Senate Committee on Health, Education, Labor, and Pensions held its confirmation hearing for Secretary of Labor-Designate Hilda Solis on January 9, 2009. Go to the link blow to view the question and answer portion of the hearing.

http://help.senate.gov/Hearings/2009_01_09/solis.pdf

Comments appreciated. Calls, e-mails, and letters to your U.S. Senators would be even better. Join "Americans for Hilda Solis as Secretary of Labor" on Facebook and post statements of support.

Fraternally,

Bob Daraio

Chicago Cubs Sale Deal In 'Uncharted territory'

By Michael Oneal | Tribune reporter
Chicagotribune.com

Tribune Co., Ricketts family face tough financial, tax hurdles

In the good old days—say, 18 months ago—when financing was plentiful and bankers were lining up to do deals, doubting whether Tribune Co. could close a complex transaction to sell the Chicago Cubs would have provoked guffaws.

All anyone wanted to talk about then was how far above $1 billion Tribune Co. could push the deal's price tag. The sky seemed the limit.

But now the Chicago-based media company and owner of the Chicago Tribune has ended an epic two-year auction for the team and Wrigley Field by choosing a bid worth $900 million from Omaha's Ricketts family, and still there are whispers that closing a deal will be no slam dunk.

What's changed is everything: The economy is in convulsions, the banking industry is in crisis, and Tribune Co. has tumbled into bankruptcy court. The danger is that things will get worse as Tribune Co. and the Ricketts try to hammer out a final transaction able to pass muster with Major League Baseball, Tribune Co.'s bankruptcy judge and the banks financing the deal.

"Will the banking market totally collapse?" asked one person close to the situation. "I doubt it, but that's the risk."

Allen & Co. investment banker Steve Greenberg, who worked on a competing Cubs bid for a group led by Chicago financier John Canning, said there's no doubt "it's a daunting environment to get deals done."

But he said he is confident the Ricketts family and Tribune Co. can produce a deal that is bankable. The Ricketts are credible with both the banking world and the MLB owners group, he said, and the Cubs remain one of the sporting world's most prized properties.

What worries some observers, however, is that ever since Chicago billionaire Sam Zell first got involved in Tribune Co. more than two years ago, the company has attracted complexity like the Wrigley Field bleachers attract rowdy fans. Nothing has been simple. Little has been straightforward.

The structure of the proposed Cubs deal is a prime example.

Sources close to the matter said that at Tribune Co.'s urging, the Ricketts bid mimics the tax-advantaged structure known as a leveraged partnership, used last year to finance Tribune Co.'s $650 million sale of Newsday in New York to Cablevision Systems Inc.

The objective in both deals was to shelter Tribune Co. from several hundred million dollars in capital gains taxes that would be generated by selling assets the company had held through decades of growth.

In the Cubs deal, sources said, a new partnership would be formed to own the assets Tribune Co. is unloading: the Cubs, Wrigley Field and 25 percent of the Comcast SportsNet cable channel.

Tribune Co. would own about 5 percent; the Ricketts the rest.

By using this structure, which likely would last about 10 years, Tribune Co. would not officially sell the assets for Internal Revenue Service purposes. Yet it would receive the better part of $900 million in cash tax-free (it's not yet clear exactly how much).

Robert Willens, a New York-based tax analyst, said one arcane complication in this structure is that in order to avoid triggering capital gains taxes, the cash payout to the owner has to be entirely funded by debt. Tribune Co. also has to act as a guarantor of that debt to make sure it has a legitimate stake in the partnership's fortunes.

Those provisions raise several complications.

First of all, since banks will lend only so much, and Major League Baseball has rules about the level of debt a team can carry, the Ricketts will have to get highly creative to make the structure work.

Sources say they likely would borrow $450 million in the traditional way from banks. But they would raise another $450 million by liquidating family assets and moving the money between family-owned entities to create a debt-like structure designed to satisfy the IRS but not overly burden the Cubs enterprise. The cash from the deal would flow to Tribune Co.

In any leveraged partnership, Willens said, the risk is that the IRS will challenge it and, ultimately, force the taxes to be paid. And in this case there is an added twist: Would the tax agency accept that a company in bankruptcy can act as a credible guarantor of the debt?

"That's uncharted territory," said Willens. "The IRS will be looking at this very closely."

The Ricketts family and Tribune Co. declined to discuss the proposed sale.

For Tribune Co. and its creditors, things could get even more tangled. If the IRS challenges this deal over the bankruptcy issue, would it then challenge the Newsday transaction and create a tax liability that would have to come out of Tribune Co.'s bankruptcy estate?

It is also the case that the long-term tax advantages of both deals depend partly on Tribune Co.'s corporate structure, which is wrapped around an employee stock ownership plan.

Through yet another set of highly arcane rules, the S-Corp ESOP would allow Tribune Co. to unwind these partnerships in 10 years without triggering the deferred capital gains taxes.

The trouble is, it isn't certain whether Tribune Co.'s $13 billion in debt can be restructured within the context of an S-Corp ESOP. If the structure doesn't survive bankruptcy court, Tribune Co. would have to find another way to shelter the tax burden generated by the Cubs and Newsday deals or pay the taxes.

Willens said if anybody can solve the IRS issues, Zell can, noting that the Tribune Co. chairman's expertise in creating tax-advantaged structures is well-established. A source close to the deal said that Zell's team is working within established rules regarding leveraged partnerships and S-Corp ESOPs. They are confident they can get over the hurdles with the IRS regarding guaranteeing the debt while in bankruptcy.

But another source with a stake in the deal's success worried that the sheer complexity of the situation creates risks of its own. Working through all these issues, documenting them and explaining them to a slew of constituencies will take enormous time and effort. And in a period of massive uncertainty, time is not on the side of Tribune Co. or the Ricketts.

"My biggest source of trepidation is the amount of work that has to be done," the source said. "Who knows who might jump up and object?"

mdoneal@tribune.com

Wilma Liebman Designated NLRB Chairman

WASHINGTON, Jan. 22 /PRNewswire-USNewswire/ -- On January 20, 2009, President Barack Obama designated Wilma B. Liebman, a Member of the National Labor Relations Board, as Chairman.

Chairman Liebman has served on the Board since November 14, 1997.

First appointed by President Clinton, she is now serving her third term, which will expire on August 27, 2011.

In a statement, Chairman Liebman said:

I am honored by President Obama's designation to serve as Chairman, and I look forward to continuing my service on the Board with my colleague, Peter Schaumber, and ultimately with a full complement of Board Members.

I wish to thank Member Schaumber for his own outstanding service as Chairman. His leadership and collegiality, coupled with the efforts of dedicated agency staff, have enabled the Board to operate productively this past year.

The Board's work matters, just as it did when the National Labor Relations Act was passed in 1935. Democracy in the workplace is still basic to a democratic society, and collective bargaining is still basic to a fair economy. The statute we administer is the foundation of America's commitment to human rights recognized around the world.

Before joining the Board, Chairman Liebman served from 1994 to 1997 at the Federal Mediation and Conciliation Service, first as Special Assistant to the Director and then as Deputy Director. She began her legal career as an NLRB staff attorney in 1974, then served on the legal staff of two labor unions: the International Brotherhood of Teamsters (1980-1989) and the International Union of Bricklayers and Allied Craftsmen (1990-1993).

A native of Philadelphia, Chairman Liebman holds a B.A. from Barnard College and a J.D. from the George Washington University Law Center.

Tribune Broadcasting Appoints Hank Hundemer Senior Vice President/Engineering

CHICAGO, Jan. 20 /PRNewswire/ -- Tribune Broadcasting today named Hank Hundemer senior vice president/engineering. Hundemer also holds the same title for The Other Company, a third-party broadcast management company operated by Tribune Company and Local TV LLC.

"Hank has a tremendous passion for our business that is contagious," said Ed Wilson, President, Tribune Broadcasting. "His expertise and true desire to bring excellence to our stations make him a valuable asset."

Hundemer joined The Other Company and Tribune as vice president/engineering in January, 2008, after 13 years at WKRC-TV, Cincinnati. Prior to WKRC-TV, he worked in the natural gas transportation industry, measuring the flow of gas around the country.

"I joined Tribune because of the clear and concise direction that our leadership provides. We have a vision, we have rock solid goals that I personally believe in and we are having fun," Hundemer said.

Tapped to oversee engineering for Tribune and the Other Company, Hundemer is placing a strong emphasis on attracting the best talent from a diverse array of industries, not just broadcasting. "We have a bright future, with innovative initiatives ready to go. We have so much on our plate right now that we're adding to our team, which I believe is the best team in our industry," Hundemer said.

Hundemer, his wife Janet and dog, Zeke, reside in Bellevue, Ky. He received his Bachelor and Masters degrees from University of Louisville, Kentucky.

TRIBUNE is America's largest employee-owned media company, operating businesses in publishing, interactive and broadcasting. In publishing, Tribune's leading daily newspapers include the Los Angeles Times, Chicago Tribune, The Baltimore Sun, Sun Sentinel (South Florida), Orlando Sentinel, Hartford Courant, Morning Call and Daily Press. The company's broadcasting group operates 23 television stations, WGN America on national cable, Chicago's WGN-AM and the Chicago Cubs baseball team. Popular news and information websites complement Tribune's print and broadcast properties and extend the company's nationwide audience. At Tribune we take what we do seriously and with a great deal of pride. We also value the creative spirit and are nurturing a corporate culture that doesn't take itself too seriously.

Tribune to Deregister Debt Securities With SEC


CHICAGO, Jan. 22 /PRNewswire/ -- Tribune Company today announced that it has filed a Form 15 with the Securities and Exchange Commission (SEC) to deregister its debt securities and suspend its reporting obligations under the Securities Exchange Act of 1934. As a result of the Form 15 filing, the company will no longer be required to file with the SEC certain reports and forms, including Forms 10-K, 10-Q, and 8-K.

Following the consummation of the going-private transaction on December 20, 2007, the company initially remained subject to SEC reporting obligations with respect to its Exchangeable Subordinated Debentures due 2029 (PHONES) listed on the New York Stock Exchange. However, the New York Stock Exchange delisted the PHONES in January 2009 due to the company's chapter 11 filing. Consequently, the company no longer has any securities outstanding that are listed on a national exchange that would require continued SEC reporting.

In making its determination to deregister its debt securities and suspend its SEC reporting obligations, the company considered several factors, including the company's ongoing restructuring efforts in connection with its chapter 11 filing and the continued availability of certain financial information as a result of chapter 11 court filings by the company.

Monthly operating reports and other information about the company will continue to be made available in the company's filings with the bankruptcy court in connection with its chapter 11 bankruptcy proceedings. For more information about the company and its chapter 11 bankruptcy proceedings, visit http://www.tribune.com or http://chapter11.epiqsystems.com/tribune, or call 888/287-7568.





SOURCE Tribune Company

Unlucky 13: Significant Layoffs and Budget Cuts at PBS's Flagship Station in New York

by Felix Gillette
The New York Observer

WNET-Thirteen, PBS's flagship station in New York, is on the verge of enacting significant staff and budget reductions for the coming year. The layoffs will also affect sister station WLIW-21 and the station's parent public media organization WNET.org.

Neal Shapiro, President and C.E.O. of WNET.org, told The Observer on Thursday evening that his organization, including the stations, will be cutting 8 percent of its budget for the upcoming fiscal year. The cuts will be achieved, according to Mr. Shapiro, through cost-cutting measures (such as reductions in back-office costs) and by reducing the current staff by roughly 14 percent.

Out of roughly 500 individuals, 85 or so will be losing their jobs.

The current round of cuts comes at a time when for-profit media companies across the country are suffering from a significant downturn in advertising. Public media outlets are faring little better. Back in December, executives at National Public Radio announced that they were cutting 7 percent of NPR's work force and slashing expenses across the board. It was the first major round of layoffs at NPR in roughly a quarter century.

According to Mr. Shapiro, individual, corporate, and government funding for WNET and WLIW has declined significantly in recent months.

"A lot of the people that give to us generously find that they themselves have less to give," said Mr. Shapiro. "A lot of the foundations we depend upon, their portfolios are down, just like everybody's individual portfolios. Especially in a city like New York. It's doubly hard because many of the people who are contributors work in the financial sector, and we all know what's happened to them."

The organization's endowment also took a major hit during the market downturn, declining by roughly 25 percent, from $112 million in June 2008 to $84.5 million in January 2009. To make matters worse, Governor David Paterson recently submitted a budget that calls for a 50 percent reduction in the overall funding for public television—a reduction which, if passed, would amount to a roughly $4.5 million cut for WNET.org.

"If that happens, we'll have to take more actions," warned Mr. Shapiro.

Mr. Shapiro, the former president of NBC News (from 2001 to 2005), took over the public media group in February 2008 after a year-long transition period. He replaced former chief William Baker. Mr. Shapiro came in hoping to increase the metabolism of the public television stations and to put more emphasis on digital media.

On Thursday, Mr. Shapiro said that he still had great ambitions for the organization, but acknowledged that some of his goals might have to be put aside for the time being.

"I haven't lost my enthusiasm or my dreams about how to make this great institution even greater, but I have to be realistic," said Mr. Shapiro. "As a nonprofit, we don't have to turn in a 10 percent year-end return, we have to break even. But that's affected by the whole environment in which we operate. If that means, we have to back-burner some things for a while, we'll do that. I still believe in the mission."

"Given how perilous the economy is at the moment, I think these are the right steps to take," he added.

Hollywood says ‘cut’ to lavish paychecks

By Claudia Eller
Los Angeles Times

Because of the faltering economy and falling DVD revenue, the studios are chipping away at the generous financial deals long enjoyed by the most established stars and filmmakers.

Welcome to Hollywood's new movie math.

Thanks to the nose dive in the economy and, even more troubling to the movie industry, declining DVD sales that have propped up the business for years, the studios are hammering down the generous financial deals long enjoyed by the most established stars and filmmakers.

The financial scrutiny once reserved for big-budget movies is now getting applied to the studios' chief staple -- the mid-size picture -- which constitutes the bulk of the films made in Hollywood.

Few movie projects illustrate the new economic reality better than "Morning Glory," a comedy about a grizzled TV anchorman played by Harrison Ford who is hired to co-host a struggling morning talk show for a hard-driving producer portrayed by Rachel McAdams. It's the kind of movie by a noted screenwriter, Aline Brosh McKenna, who hit it big with "The Devil Wears Prada," that until recently a studio wouldn't balk at making.

But Paramount Pictures, the studio behind "Morning Glory," did balk, agreeing to make the movie only under the condition that Ford, producer J.J. Abrams and others cut their fees and adjust the formulas that let them earn profits in the picture.

For years actors, directors, producers and writers have ridden the rising crest of the entertainment business by commanding lavish paychecks as the studios have been willing to pay ever-higher sums for their services. They routinely dictated financial terms to the studios, which had little choice but to accept them if they wanted to make the movie.

No longer. In a sign of the times, Ford and others involved with "Morning Glory" agreed to reduce or defer their compensation to get the picture made. "Morning Glory" was originally budgeted at about $65 million, a risky sum for a comedy featuring an aging star mostly recognized for action roles.

Because the filmmakers and talent are consenting to hold off full payment of their fees, the movie will cost the studio about $40 million after a tax credit it will earn from shooting in New York this spring. That's considered a reasonable bet.

Creative deal making is becoming increasingly common throughout Hollywood as the recession exacerbates the pressures studios already feel on their bottom line. Indeed, Hollywood is watching DVD sales slide with as much anxiety as Detroit is witnessing a plunge in auto sales.

DVD sales fell 9% in the U.S. in 2008, despite a push for the new high-definition Blu-ray format. Analysts expect similar declines in home video sales throughout 2009.

As a result, studios have vowed to take a tougher stand against the financial demands of actors and filmmakers as they struggle to adjust to slower growth.

"Since I've been in the business the agent's job has been to raise their client's fee," said Ron Bernstein, a literary agent with International Creative Management. "Today, in almost any negotiation, you are expected to reduce your client's money."

In "Morning Glory," for example, Ford is getting paid $8 million upfront, millions less than he ordinarily would receive for a non-action role. McAdams, an up-and-coming star who garnered attention in "The Notebook" and "The Family Stone," agreed to $2 million upfront even though her most recent fee was $4 million for the upcoming futuristic adventure movie "The Time Traveler's Wife." Director Roger Michell is also getting $2 million, half of what he's made previously.

Abrams, a creator of ABC's popular series "Lost" and one of Hollywood's most sought-after filmmakers, is not taking any money upfront.

"The architecture of this deal feels inherently practical," Abrams said. "Not just because of the current economic situation but because of the [new] realities of Hollywood." He declined to comment on the financial terms of the film's talent deals.

"Morning Glory" represents a growing trend in the movie business that claws back one of Hollywood's most lucrative prizes: The so-called "first-dollar gross" deal enjoyed by stars and top-tier filmmakers. Those deals cut talent in on ticket sales, siphoning off valuable revenue before the studios can earn back their investment.

Increasingly, studios are insisting on breaking even before doling out profits to participants. Although that limits what stars and filmmakers can earn upfront, it also can sweeten the pot for them when the movie is a blockbuster.

Moreover, on "Morning Glory," in exchange for the stars and filmmakers forgoing their cherished first-dollar gross arrangements, Paramount agreed to give something back that studios typically do not grant on mid-range budget pictures: In calculating what it will pay the film's talent, Paramount will base its formula on 100% of the DVD revenue it receives, rather than the customary 20%.

This has been customary on big-budget movies, where studios have hundreds of millions of production and marketing dollars at risk. Walt Disney Studios has invoked a no-first-dollar gross policy on such costly pictures as the "Pirates of the Caribbean" series and its planned production of "The Sorcerer's Apprentice," a fantasy adventure starring Nicolas Cage.

Now talent involved in moderate-cost movies are also getting pinched.

Sony Pictures was able to make its romantic comedy "Julie & Julia," starring Meryl Streep, written and directed by Nora Ephron, for $35 million because the talent made concessions. The same went for Universal Pictures' " Frost/Nixon," which cost $29 million to produce after everyone involved, including director Ron Howard and his producing partner Brian Grazer, was flexible on compensation.

"The economics of the movie business are challenging right now," said Michael Lynton, chairman of Sony Pictures. "We're all trying to be creative about our deal making."

claudia.eller@latimes.com

Sportscaster Sal Marchiano insists he's not done yet

by Bob Raissman
NY Daily News

Nearly a month ago, Sal Marchiano picked up a newspaper and read he had "retired" from his job as nightly sports anchor for WPIX-TV, a position he held for 14 years. This was like a living, breathing somebody reading his obituary.

"Sal made a decision to retire at the end of this year, and last week was Sal's last week on the air as our sports anchor," a WPIX-TV spokeswoman told the Daily News in late December.

Thursday, Marchiano, who for 41 years (at Channels 2, 7 & 11), provided highlights, wisecracks and sarcasm to those inclined to "keep it where it is," chuckled at the notion he had decided to call it quits.

"Reports about my retirement were - and are - inaccurate," Marchiano said.

"When I ended my 'last' sportscast (Dec. 18) I said: 'I'm going on a vacation to search for my long-lost shaker of salt.' What I didn't - and couldn't - say was I was taking this 'vacation' because the Tribune Co. (PIX's parent company), which declared bankruptcy (last month), did not renew my contract," Marchiano said. "So, I'm a free agent."

Just a guy forced out of his job. This all goes back to last fall when an executive from another outlet told him all local stations were losing money. The suit warned Marchiano, "Watch out, a storm is coming."

"But I thought they (PIX) would renew me," Marchiano said. "To the very end, Hyundai sponsored my sportscast every night. I always thought that (selling cars) was the reason I was there."

Outside of that warning, Marchiano had no reason to believe otherwise. He remained popular, had an ally in PIX news director Karen Scott ("It wasn't her decision to put me out to stud, which in my case is redundant," Marchiano said), and was willing to be flexible when it came to contract negotiations.

Reality visited Marchiano on Oct. 30. The day defined the true meaning of mood swing. In the morning his daughter, Sam, gave birth to a boy, Cal. Marchiano arrived at work feeling just how a new grandfather should feel.

A few hours later he was in no mood to pass out cigars.

"That afternoon," he said, "they told me I was out - finished. They were not renewing my contract. The order came down from the top. You might say I had a bittersweet day."

An understatement from a man who rarely deals in that genre. Yet, his reluctance to talk about the end at WPIX, while that December spin about him "retiring" was being spread, was just business. Clearly, he was waiting for those checks to clear.

Marchiano's termination is more about what's happening in the local TV news business than it was about his performance. Industry sources say all six local stations, which for decades were cash registers, are losing money - big money. This has led to cutbacks. It has also led to major players, including local sports anchors making mid six-figures and up, either taking drastic pay cuts or, in Marchiano's case, being fired.

For years now, local sportscasters have been on the endangered species list. Many news directors - some genuflecting to consultants who have mistaken New York City for Iowa City - have attached a low priority to their nightly sportscasts.

"The sports guys are tolerated, but minimized. But the local sportscasts are still important. We are all still viable because we offer, through highlights and commentary, a local slant....That's why I lasted for (over) 40 years," Marchiano said. "Look, I'm not the greatest guy there ever was, but the point is you knew it was me. I'm known by first name."

Familiarity has been devalued. The suits would rather bring in a rotating cast of know-nothing wannabes practiced in the art of awful ad-libs, smarmadukes who have no connection with their audience and no feeling for the marketplace.

Now, there is not even a trace of bitterness in Marchiano's voice. Considering that other local sportscasters, on the outside looking in, still constantly complain about their demise, this is fairly remarkable. Or is it? Marchiano said he ain't looking back, only ahead to the next gig.

Four months ago, he had emergency knee surgery to repair a torn meniscus and is finishing up his rehabilitation. Soon, he will head for South Florida to visit friends.

"But I'm only a phone call away. It's peculiar not going in to do a sportscast every night," he said. "What I dwell upon is my brand, which is familiarity and credibility. So, I'm hanging out my shingle."

All of a sudden, it seemed like it was around 10:50 p.m. on Ch. 11. He blasted Woody Johnson for not meeting with Bill Cowher. Tore up the Giants' and Jets' PSL plans. And wondered who would fill all those expensive seats at Citi Field and the new Yankee Stadium.

Right then you hoped someone with a clue would do the right thing.

And return Sal Marchiano back where he belongs.

braissman@nydailynews.com

Tribune Company. building its case to stay intact

Corporate structure may need to be altered to reach workable plan.

By Michael Oneal | Tribune reporter
Chicago Tribune

A month into its Chapter 11 bankruptcy case, Chicago-based Tribune Co. is beginning to form a strategy for holding the company's major assets together, not tearing them apart, sources close to the situation said.

But shaping up to be a central challenge is how to restructure the media conglomerate's $13 billion in debt while preserving its complex, tax-advantaged employee-ownership structure.

Though Tribune Co. executives remain in the early days of building a plan of reorganization, sources said Chairman Sam Zell's team is operating on the assumption that Tribune Co. assets like the Chicago Tribune, Los Angeles Times and WGN TV-9 are probably worth more held together than they would be chopped up and sold at distressed prices.

An exception is the Chicago Cubs baseball team, which is in the late stages of being sold, with a winning bidder expected to be named as soon as this week.

Zell is also intent on preserving Tribune Co.'s S-Corp ESOP corporate structure, reasoning that its tax advantages will continue to have significant value if the company can emerge from bankruptcy protection as a going concern.

The trouble with this plan, tax experts said, is that reworking Tribune Co.'s financing could be hampered by restrictive tax rules that govern S-Corp ESOPs, corporate structures built around an employee stock ownership plan.

Several creditor representatives said last week that they might support keeping the current structure intact but said making a deal succeed in that framework will be difficult.

"That's one of the big issues," said Chadbourne & Parke attorney Howard Seife, who represents Tribune Co.'s committee of unsecured creditors.

A Tribune Co. spokesman declined to comment.

Tribune Co. and its advisers are focused on building a case for how much the company is worth and how much cash flow it can generate in the future. That analysis will lead to a calculation of how much debt the company can support going forward, very likely a number significantly lower than the company carries today.

Once that is done, the company will have to create a plan to rework the capital structure in a way that lowers the debt to sustainable levels but gives creditors enough in return that they agree to move forward without a fight.

That's where the S-Corp ESOP complicates things.

Zell came up with the S-Corp structure to help grease his $8.2 billion bid to take Tribune Co. private in December 2007. Its advantage: It allows the company to pass through its annual tax liability to an ESOP, which doesn't have to pay taxes because it is a qualified retirement plan.

By eliminating those taxes, the structure promised to boost Tribune Co.'s cash flow enough to support the fat debt load needed to get the going-private deal done.

It subsequently helped to structure Tribune Co.'s tax-advantaged deal to unload its Newsday metropolitan daily in New York for $650 million and may figure prominently in sheltering Tribune Co. from a big tax bill from the Cubs transaction.

Tax advantages, of course, didn't mean much last year when the newspaper market faltered and the economy fell apart, forcing Tribune Co. to file for Chapter 11 on Dec. 8. But sources close to both Tribune Co. and its creditors said that the S-Corp tax benefits could become an essential part of the company's ongoing value if the economy improves and Tribune Co. manages to emerge from bankruptcy as a profitable company.

To get there, however, creditors like JPMorgan Chase, Citigroup and Bank of America will have to agree to forgive some of Tribune Co.'s debt, possibly billions of dollars worth. And given the S-Corp complications, a typical solution used to make that easier—swapping debt for equity—may not be feasible in this case, experts said.

Among other things, tax rules stipulate that an S-Corp can have only 100 shareholders and that they must be individuals, not corporations. A retirement plan like an ESOP, which can have thousands of members, is permissible. But a giant lender like JPMorgan wouldn't be.

In Tribune Co.'s S-Corp ESOP, the employee plan owns 100 percent of the company's equity. Zell and a small group of other individuals hold warrants to buy about 40 percent. At the moment, the ESOP shares are essentially worthless. But if the company recovers and grows over time, the employee shares could grow too.

Robert Willens, a highly regarded tax adviser in New York, said the S-Corp rules would impede swapping debt for equity under the current Tribune Co. structure. The company could revert to a C-Corp, the standard corporate structure, but then it would lose its income tax break and leave itself exposed to tax bills from the Newsday transaction and, possibly, the Cubs deal.

An alternative, Willens said, would be to compensate lenders with some sort of debt security that had no interest requirements and equity-like characteristics that allowed the lenders to participate in the company's upside.

"It would have to be equity-like, but not so equity-like that the government determines that you've really just created a second class of stock," Willens said.

Another bankruptcy tax expert who asked not to be named, however, said that some lenders might not be willing to risk the legal ambiguity that can accompany such an arrangement. No matter what lawyers advise now, he said, the Internal Revenue Service can challenge it later, and often does.

"It can become a constant battle," he said. "They have to ask themselves, is this S-Corp structure worth living with, or do we want to trash it and go back to a C-Corp?"

One advantage Tribune Co. has as it contemplates a solution is time. In court filings, the company projects maintaining more than $500 million in cash over the next year, largely because its newspapers and television stations generate operating income. On Thursday, it got the court to sign off on extending an existing $300 million in short-term receivables financing from Barclays Bank PLC, as well as a $50 million letter of credit.

That means it can operate its businesses without seeking outside financing at a time when nobody is lending, especially to companies in bankruptcy.

It also is true that few of Tribune Co.'s creditors have a direct call on the company's assets, a vestige of the loose lending practices that directly preceded the economic crisis. The big lenders like JPMorgan that financed the buyout deal have seniority over other creditors.

But unlike in many other bankruptcies, these senior lenders have no right to demand interest payments from Tribune and have little control over how the company manipulates its hard assets.

Consequently, Tribune management can continue to restructure the company and try to come up with a plan to reconfigure the capital structure that lenders can accept.

"It's unique to have a company that can fund itself," said an adviser to one large creditor. "The whole panoply of options is still outstanding."

mdoneal@tribune.com

U.S. Labor Department adopts tougher financial disclosure rules for unions

Feds say the regulations to require most unions to publicly report most compensation for officers will help expose the kind of scandal allegedly found in the SEIU's L.A.-based local.

By Paul Pringle

The federal government has adopted new financial disclosure rules for labor organizations that officials say would help expose the sort of corruption allegedly found in the largest California chapter of the Service Employees International Union.

The U.S. Labor Department, in the final hours of the Bush administration, has toughened standards to require most unions to publicly report nearly all compensation and expenses for officers and employees, the agency announced Friday.

Also broadened were disclosure requirements for the sale and purchase of property, with the aim of revealing whether any union officers or employees profit from the transactions.

In the alleged SEIU scandal, the Los Angeles-based local's former president, Tyrone Freeman, has been accused by the union of enriching himself and his family with more than $1 million in misappropriated dues money. The SEIU ousted him after The Times reported on his spending practices last summer.

"Tyrone is a poster boy for the reforms," said Don Todd, a Labor Department official who oversees reporting standards.

But union representatives said that although they had yet to review the new rules, the changes struck them as the latest punitive measure in an eight-year campaign against organized labor.

"The Bush administration has imposed onerous new reporting requirements on unions that have nothing to do with uncovering misuse of union funds or providing useful information to union members," AFL-CIO spokeswoman Alison Omens said in a statement.

SEIU spokeswoman Michelle Ringuette said in an e-mail that the new rules appear to be "predictable eleventh- hour maneuvers of the Bush administration, and we look forward to the day the DOL is focused on protecting workers by enforcing existing regulations preventing exploitation by unscrupulous employers."

An SEIU dissident, however, said he welcomed further disclosure. Sal Rosselli, president of an Oakland-based local, has feuded with the SEIU's national leadership over the direction of the union. He said the national office has refused to fully disclose how much money it has spent on the internecine fight.

"Transparency on how unions spend their members' dollars, from our point of view, is wanted," Rosselli said. "We let our members look at every check."

The Labor Department began requiring unions to itemize more of their expenses several years ago. Under the new rules, the organizations must disclose additional types of compensation and expenses, such as retirement benefits, by the name of the officer or employee who receives them.

Some unions have indicated that they will ask the administration of President-elect Barack Obama to roll back the reporting requirements. Obama has nominated Rep. Hilda Solis, a pro-union Democrat from El Monte, as Labor secretary. She could not be reached for comment late Friday.

Todd denied that the Bush administration has used the law to torment unions. "They're just opposed to disclosure," he said.

__________________

Note: I have no problem with full disclosure. Most Union business should be transparent, open, and available for all to see. We should also demand equally stringent enforcement of the corporate business disclosure rules as part of this regulation. Let's see how vocally conservatives support union disclosure when equal disclosure on anti-union spending by businesses is required and enforced.

BD

A Pilot Becomes a Hero Years in the Making

Note: While this is not a TV/Film/Theatre/Print Media labor story, Captain Sullenberger is a long time dues paying member in good standing and Safety Representative with the Air Line Pilot's Association. - BD

By RAY RIVERA
The New York Times


Capt. Chesley B. Sullenberger III had just performed a remarkable feat of flying. Some were calling it a miracle. But there he stood, calmly, inside the glass waiting room at the New York Waterway terminal on Pier 79, speaking to police officials. His fine gray hair was unruffled, and his navy blue pilot’s uniform had barely a wrinkle.

“His tie wasn’t even loosened,” said Edward Skyler, a deputy mayor of New York City, who stood nearby.

Michael A. L. Balboni, the state’s deputy secretary for public safety, worked his way through the room to introduce himself. He shook the pilot’s hand, looked him in the eye and thanked him for a job done brilliantly: the precise, soft, lifesaving landing of a 50-ton jetliner in the Hudson River.

“He said to me, in the most unaffected, humble way, he says, ‘That’s what we’re trained to do,’ ” Mr. Balboni said. “No boasting, no emotion, no nothing.”

While the world clamored Friday for his story, and government leaders applauded his professionalism, and fan pages sprang up on the Internet, Captain Sullenberger retained his focus, avoiding the limelight as he awaited an interview Saturday with federal investigators studying what went wrong with US Airways Flight 1549.

Heroes are often born in an instant, the split second it takes to recognize a pending disaster and react, the blink of an eye it takes a Wesley Autrey to throw himself under a subway train to save a man fallen on the tracks.

In Captain Sullenberger’s case, it was years in the making.

Captain Sullenberger, 57, the US Airways pilot who safely brought the wounded Airbus A320 passenger plane to rest on the Hudson on Thursday, had been with the airline for nearly 30 years and was steeped in the safety side of the industry.

He had worked with federal aviation officials investigating crashes and improving training and methods for evacuating aircraft in emergencies. He got his pilot’s license as a teenager, flew F-4 Phantoms for the Air Force and was a 1973 graduate of the Air Force Academy, where he received the Outstanding Cadet in Airmanship Award, given to the top flier in each graduating class.

He even flew gliders, which is sort of what he was left with Thursday when something, perhaps birds, knocked out both engines in his plane.

Many people, from the first officer to members of the flight crew, from the passengers to the civilian and city rescue crews who converged on the craft to save them, earned accolades on Thursday. But Captain Sullenberger’s efforts, like twice checking the soaked cabin for stragglers before fleeing the sinking plane himself, emerged as singularly selfless leadership of a sort that seemed so removed from things like Ponzi schemes and subprime mortgages, corporate bailouts and deflected blame.

“If it wasn’t for him, I wouldn’t be here today,” said Mary Berkwits, a passenger from Stallings, N.C. “He was just wonderful.”

Another passenger, Nick Gamache, a software salesman from Raleigh, N.C., said he was the “picture of calm.”

“I mean, he was directing people to get on the raft,” Mr. Gamache said. “Then I saw him in the terminal. That’s where I was like, ‘Thank you, you just saved all our lives.’ ”

Howard J. Rubenstein, the public relations guru, called Captain Sullenberger a “publicist’s dream,” and envisioned lucrative book deals, movie pitches and product endorsements in his future.

“He’s got 150 people out there and their families out promoting him,” he said.

He is also a boon for an airline that has filed for bankruptcy twice in recent years and has been plagued by publicity nightmares. Two Christmases ago, US Airways lost 75,000 bags, some not found for months. Last year it became the first airline to charge for coffee, tea and bottled water.

Perhaps only in a coincidence, the airline’s share price shot up 13 percent Friday.

Captain Sullenberger fielded congratulatory phone calls from President Bush and President-elect Barack Obama on Friday, but mostly stayed secluded somewhere in the city. He did not attend a ceremony at City Hall, where Mayor Michael R. Bloomberg said his actions “inspired people around the city, and millions more around the world.”

The airline would not discuss his whereabouts or how he spent the day.

Friends, relatives and colleagues described Captain Sullenberger as even-tempered and unassuming. “He wouldn’t take easily to being called a hero,” said Jim Walberg, a family friend.

At Pier 79 on Thursday, while others huddled in thermal blankets, he stood without one while talking to detectives and aviation officials. One official there said Captain Sullenberger mentioned to an officer that one of his priorities was to call his wife and cancel a dinner reservation.

On Friday in Danville, Calif., 40 miles east of San Francisco, the quiet cul-de-sac where the Sullenbergers reside was abuzz with television and newspaper journalists. Lorrie Sullenberger, the wife, along with two daughters, a cat and a yellow Labrador retriever named Twinkle, has mostly been in seclusion since the accident, still shaken by the close call, said many neighbors, and looking forward to the pilot’s return.

Ms. Sullenberger stopped briefly to talk to reporters on her lawn as she ushered her daughters off to school Friday morning.

“My husband has said over years that it is highly unlikely for any pilot to have an incident in his career, let alone something like this,” Ms. Sullenberger said. “So I was stunned when he called and said there’s been an incident, and even then I thought maybe it was a tug that maybe had bumped the airplane. Your mind never goes to something like this.”

Jake Brown, a neighbor, said Captain Sullenberger’s feat was no surprise to those who knew him.

“He is someone who walks into a room and you know he is in charge,” said Mr. Brown.
Captain Sullenberger grew up in Denison, Tex., a town of about 23,000 on the Oklahoma border where his street was named for his mother’s family, the Hannas.

His father was a dentist. His mother taught grade school. Both are deceased.
His only sibling, Mary Wilson, said that even as a boy, Captain Sullenberger showed a meticulous attention for detail. He would build model aircraft carriers with tiny planes, careful to paint every last component.

“He’s very friendly,” she said, “but when it comes to being a pilot, that comes second.”
Ms. Wilson said her brother might have become interested in flying from listening to stories of his father’s Navy service. His high school friends say his passion came from watching jets from the now-defunct Perrin Air Force Base roar through the big skies over his home. In his teens, when most of his peers were learning to drive cars, he already had his pilot’s license.
Captain Sullenberger graduated near the top of his class of about 350 people and was the first-chair flautist in the marching band and involved in the Latin Club.

At the academy, he was selected along with about a dozen other freshmen to be involved in a cadet glider program, and by the end of the year was an instructor pilot.

“It was a tremendous asset to get exposed to that kind of flying early on,” said John Eisenhart, a fellow cadet in the program who now flies 767s for United Airlines. “And there’s no doubt in my mind that that came into play yesterday. When you’re in a glider you’ve got one shot at it. You’ve got to plan your energy, and of course your altitude is your energy, and that gives you one shot at the approach.”

Eric Vogel, who was in Captain Sullenberger’s squadron all four years at the academy and roomed with him during their freshman summer, said that even in the boot camp-like atmosphere that first summer, Captain Sullenberger was “unflappable.”

“You have all this pressure of a new lifestyle, and you have people yelling at you and things like that, and he would just take it and move on,” said Mr. Vogel, a pilot with Southwest Airlines.

Captain Sullenberger went on to earn two master’s degrees and become a safety expert who served on panels for the National Transportation Safety Board, among others. In one instance, he was among a group that studied emergency evacuation practices after a crash in Los Angeles, again a bit of experience likely to have come in handy on Thursday.

John Cox, a safety consultant and a former safety representative with Captain Sullenberger for the Air Line Pilots Association, said his friend personified what you wanted in a professional pilot.

“He’s naturally talented as an aviator, and he’s had very good training,” Mr. Cox said, “and it all came together on that landing in the Hudson.”

Tribune Granted Approval of Motions on Business Operations and Procedural Matters

CHICAGO, Jan. 15 /PRNewswire/ -- Tribune Company announced today that the United States Bankruptcy Court for the District of Delaware has approved several motions related to business operations and procedural matters.

In addition to other favorable rulings related to business operations, the company is now able to:


-- Enter into a joint agreement with Dow Jones & Co. under which the
Chicago Tribune Company will print the daily and weekend editions of
The Wall Street Journal and Barron's in the Midwest region,
-- Make certain pre-petition contributions to 16 union pensions,
-- Pay vendors who delivered goods within 20 days prior to the company's
Dec. 8, 2008, Chapter 11 filing,
-- Pay certain commissions earned prior to Dec. 8, 2008.


The court also approved several procedural motions, including final approval of the extension of a pre-existing $300 million securitization facility.

A complete list of the rulings today will be posted at
http://chapter11.epiqsystems.com/tribune.

On December 8, 2008, Tribune Company, et al., (collectively, the “Debtors”) filed petitions in the United States Bankruptcy Court for the District of Delaware seeking relief under chapter 11 of the United States Bankruptcy Code.

The Debtors’ cases have been assigned to Judge Kevin J. Carey. The Debtors have filed a motion seeking to jointly administer these cases, and if approved, all pleadings filed in these cases will be reflected on case docket 08-13141 (“Main Case Docket”).

The Main Case Docket can be accessed through the website maintained by the United States Bankruptcy Court for the District of Delaware http://www.deb.uscourts.gov.

The deadline for the filing of proofs of claims against the Debtors in this case has yet to be established by the Bankruptcy Court. However, should you choose to file a proof of claim form at this time, completed forms can be sent to the following addresses:

If by first-class mail:

Tribune Company Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
FDR Station, P.O. Box 5069
New York, NY 10150-5069

If by Hand Delivery or Overnight mail:

Tribune Company Claims Processing Center
c/o Epiq Bankruptcy Solutions, LLC
757 Third Avenue, 3rd Floor
New York, NY 10017

OFFICIAL COMMITTEE OF UNSECURED CREDITORS

JPMorgan Chase Bank, N.A.
In its capacity as lender
Attn: Miriam Kulnis
277 Park Avenue, 8th Floor
New York, NY 10172
Phone: (212) 622-4526
Fax: (212) 622-4556

Merrill Lynch Capital Corporation
In its capacity as lender
Attn: Michael O’Brien
4 World Financial Center
250 Vesey Street
New York, NY 10080
Phone: (212) 449-0948
Fax: (212) 738-1186

Deutsche Bank Trust Company Americas
As Indenture Trustee
Attn: Stanley Burg
60 Wall Street
New York, NY 10005
Phone: (212) 250-5280
Fax: (212) 797-8610

Warner Bros. Television
Attn Wayne M. Smith
4000 Warner Boulevard
Building 156
Room 5158
Burbank, CA 91522
Phone: (818) 954-6007
Fax: (818) 954-5434

Vertis, Inc.
Attn: John V. Howard Jr., Esquire
250 West Pratt Street
Baltimore, MD 21201
Phone: (303) 305-2025
Fax: (410) 454-8460

William Niese

Pension Benefit Guaranty Corporation
Attn: Craig Yamaoka
1200 K Street, NW
Washington, D.C. 20005
Phone: (202) 326-4000 x 3614
Fax: (202) 842-2643

Washington-Baltimore Newspaper Guild
Local 32035
Attn: Robert E. Paul and/or William Salganik
1100 15th Street, N.W., Suite 350
Washington, D.C. 20005
Phone: (202) 785-3650
Fax: (202) 785-3659

Debtors’ Counsel

Sidley Austin LLP
One South Dearborn
Chicago, IL 60603
http://www.sidley.com
Attn: Kenneth P. Kansa Esq.

Debtors’ Delaware Counsel

Cole, Schotz, Meisel, Forman & Leonard, PA
1000N. West Street, Suite 1200
Wilmington, DE 19801
http://www.coleschotz.com
Attn: Norman L. Pernick, Esq.
J. Kate Stickles, Esq.

U.S. TRUSTEE

The Office of the United States Trustee
J. Caleb Boggs Federal Building
844 King Street, Suite 2207 - Lockbox # 35
Wilmington, DE 19899-0035
Phone: 302-573-6491

Debtor’s Website: http://www.tribune.com

Former Employees

• What about my 401(k)?

Your retirement cash balance account (if applicable) and 401(k) account are unaffected by the Chapter 11 filing.

• What happens to our pension and cash balance accounts?

In general, the existing benefits in the pension and cash balance plans are unaffected by the filing.

All pension benefits provided by the traditional qualified pension plans of Tribune Company and its subsidiaries, which provide benefits to virtually all current non-union employees and many former employees, are protected in the bankruptcy proceedings.

If you have further questions on retirement plans, please call the Benefits Service Center at 800-872-2222.

• I was laid off this year, but I’m still covered under Tribune health benefits. Will that coverage continue?

For employees who were laid off in 2008 and are over age 55, we received the court’s permission to continue health coverage according to the terms in place.

For those under age 55, we received the court’s permission to continue health coverage for three months. At the end of three months, that coverage would terminate unless they can certify that they are retired.

• How are severance payments affected?

All ongoing severance payments, deferred compensation and other payments to former employees have been discontinued and will be the subject of later proceedings before the Court. In addition, outplacement services were discontinued as of the petition date. Please contact the Tribune Benefits Service Center at 800/872-2222 for details on your specific situation.

• Why can’t you tell us more? Why are there so many unknowns?

This is the first step in the restructuring process. We will be working with many parties to resolve the outstanding questions. We’ll update you whenever we can, but keep in mind that this is a process, and we may not have definitive answers for some time.

• Where can I get more information

- Tribune.com
- http://chapter11.epiqsystems.com/tribune
- 888-287-7568

Freelancers and Stringers

On Dec. 8, 2008, Tribune Company and related entities filed to restructure its debt under protection under Chapter 11 of the U.S. Bankruptcy Code. At that time, we were
prevented from paying freelancers and stringers for outstanding work done prior to that date. We value our relationship with you and believe it is important to pay you for the work you performed.

After a careful review of the outstanding invoices submitted by the freelancers/stringers at Tribune’s business units, the company has determined that it will be possible to begin paying these individuals for work done prior to Dec. 8, 2008.

These payments are subject to a statutory limit of $10,950 per individual. The vast
majority of our freelancers/stringers fall below that cap. It will take a little time to process these payments; we hope to have everyone paid by mid-January, if not sooner. Thanks for your continued patience.

As you know, paying freelancers and stringers for work done on or after Dec. 8 was not affected by our filing. Freelancers and stringers will be paid for work performed after on or Dec. 8 in the normal course of business.

Retirees

• What about retiree benefits? How are they impacted?

We received the court’s permission to continue retiree medical benefits,
including the announced changes for 2009, for all participants.

• What happens to our pension and cash balance accounts?

In general, the existing benefits in the pension and cash balance plans are
unaffected by the filing.

All pension benefits provided by the traditional qualified pension plans of
Tribune Company and its subsidiaries, which provide benefits to virtually
all current non-union employees and many former employees, are
protected in the bankruptcy proceedings.

If you have further questions on retirement plans, please call the Benefits
Service Center at 800-872-2222.

Random Thoughts On Tribune Lost

Posted by Bob Daraio
Broadcast Union News

A year ago Sam Zell bought the Tribune Company for around $8 billion dollars in a leveraged buy out that used the employee's pensions, huge bank loans, a tax avoidance plan that made his non-union employees the new owners of Tribune by way of an ESOP, and was able to personally put up only about 4% of the sale price to purchase the right to buy up to a 40% stake in the company over 15 years.

In other words, Sam got control of Tribune for pennies on the dollar at very little personal risk.

At that time I was upset that Tribune's union represented employees were not included in the new Employee Stock Ownership Plan (ESOP), since I'm an IBEW represented video engineer in New York at Tribune's flagship television station station, WPIX.

What seemed to be a calculated snub, turned out to be a blessing. The "employee owners" have no seat on Tribune's board of directors, no say in company decisions, and could loose their pensions.

With over $211 million dollars in quarterly loan interest, and a much more severe than projected downturn in print and TV advertising, Sam had to sell assets such as Newsday; put the Chicago Cubs, Wrigley Field, the LA Times building, and Tribune Tower up for sale; and laid off a huge number of Tribune employees around the country; all prior to filing for bankruptcy protection.

Tribune's next loan payment of about $512 million dollars on their almost $13 billion dollar debt comes due in June 2009.

The sale of the Chicago Cubs and Wrigley Field is not a part of the Tribune bankruptcy filing. But a sale is expected to generate nearly $900 million dollars in proceeds for Tribune's creditors, and they want the cash.

Tribune's bankruptcy has delayed the Cubs sale, with creditors now seeking a bigger portion of the cash in the deal. Sam Zell had hoped to use a 50% stake in the team as a tax dodge, but must now settle for a disappointing single-digit percentage stake.

This is good news for bidders on the famous MLB team as the successful buyer will have much more equity in the Cubs than was offered in prior sales negotiations.

The sale of the Chicago Cubs must be approved by 75% of the Major League Baseball commission. Current bidders include, Incapital CEO, Tom Ricketts; Marc Utay, Managing Partner Clarion Capital Partners; and Chicago real estate developer, Hersch Klaff.

So, what does the future hold for Tribune employees at WPIX?

Sam could do a shared news gathering plan with another N.Y. TV station to eliminate some ENG crews like they did in Philadelphia, with Tribune owned WTXF, Fox 29, sharing ENG video footage and helicopter services with NBC affiliate WCAU, CH 10.

Sam could outsource operations to, or combine with, another New York station to massively cut back staff at WPIX. Tribune and Local TV Holdings, LLC combined the operations of their stations in Denver and St. Louis. In Denver, the agreement combines Local TV owned FOX affiliate KDVR and Tribue's KWGN. In St. Louis, Tribune's KPLR and Local TV owned FOX affiliate, KTVI, will share services. The two stations in each city will locate in the same facility, use combined news operations, and share certain programming.

The bankruptcy could force Tribune to sell WPIX. Our union contracts would have to be honored in such a sale, so the new owners would have to hammer out a new collective bargaining agreement with us.

Will any of this happen? It's anyone's guess.

As for me, I'll keep showing up to work, on time, sober, and ready to make pretty pictures until the paychecks stop.

SAM ZELL MAKES PIRATES LOOK GOOD

By JIM HIGHTOWER
Santa Rosa's Press GAZETTE

The difference between pirate captains of old and modern-day corporate bosses is that pirates had ethics. They fairly shared their loot, for example, with the entire crew.

Contrast that with the rip-off of employees by the bosses and bankers involved in the recent tribulations of the Tribune Company. This media conglomerate, which owns some of America's top newspapers and television stations, was bought a year ago by a Chicago real estate baron named Sam Zell.

This fellow didn't have anywhere near enough money to pay the $8.2 billion purchase price, but, hey, that's no problem for a striver. Zell simply got the company's CEO to let him use the employees’ pension fund as collateral for bank loans to buy the Tribune. Even though their money was put at risk, the employees had no say in the deal, nor in how the company was run. It was run badly. Less than a year after Zell's takeover, the Tribune has had to declare bankruptcy, and employees are likely to lose jobs, severance payments, and pensions.

Those who pulled off this heist, however, have been much more fortunate. The former CEO was given more than $40 million when Zell took charge. Citigroup and Merrill Lynch were paid about $36 million each for being "advisors" on the deal. Another Wall Street bank, Morgan Stanley, got $7.5 million just for writing a "fairness opinion," stating that Zell's use of the pension fund was kosher.

And Zell? He had put up less than 4 percent of the purchase price to get control of the company, and while he might lose some of that, he cut the deal in a way that makes him a secured creditor. This means that if the Tribune's assets have to be distributed to creditors as a result of the bankruptcy, Zell will be first in line to get his - standing in front of the employees whose company and pensions he wrecked.

No pirate would do that to his crew.


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