Teamsters Union Discredits Tribune's Case To FCC

Union Demands Agency Protect Public Interest As Required By Law

WASHINGTON, July 13 /PRNewswire-USNewswire/ -- Yesterday the Teamsters Union responded at the Federal Communications Commission (FCC) to the Tribune Co., which had opposed the union's petition to deny Tribune's application for reorganization and for waivers of the broadcast cross-ownership rules.

In its filing, the Teamsters reiterated that as a matter of law the owners of the corporation—Tribune employees—are entitled to a say in the reorganization of the company and called for the protection of localism and diversity in broadcast programming.

"Tribune failed to make the case why the FCC should rubber-stamp the company's plan to emerge from bankruptcy by transferring ownership and control of Tribune to creditors with no experience in running a media conglomerate and who have made no commitments to protect localism and diversity in programming," said Teamsters General President Jim Hoffa.

"These creditors are in the business of reclaiming the losses on their investments, and have no interest in or understanding of the broadcasting and print media business," Hoffa said. "Sam Zell's slash and burn strategy has already cost thousands of good jobs and stripped away news resources. Unless the FCC gets this right, localism and diversity in news programming could be the next Tribune casualty."

Tribune's bankruptcy plan would turn control of the company over to creditors without any commitments to maintain or improve upon the quantity of local news programming by the company's broadcasting enterprises, but Tribune employees who own 100 percent of the company have not had any say in developing or approving the plan. This is the logical consequence of the FCC's flawed 2007 decision to allow Zell to control the Tribune.

The FCC has long held that giving third parties control over the personnel, programming and finances of broadcasting outlets violates the Communications Act.

Yet, in 2007 the commission approved a change in control at Tribune that transferred full ownership of the company to employees through an employee stock ownership plan (ESOP), but gave control of the business to real estate mogul Sam Zell, who became chairman and CEO.

Doomed from the start, the overleveraged deal saddled the employee shareholders with an untenable $13 billion of debt and brought down the 161-year-old media giant within a year.

"The fact is that Sam Zell's control of Tribune was improper under existing FCC policies and flawed as a matter of sound business practice. Neither Tribune nor its creditors can argue that away," Hoffa said. "By finally allowing Tribune employee-owners their seat at the table, the FCC can help right the wrong that forced those employees to the sidelines and impaired the value of their shares while they were powerless to do anything about it. The commission can and should fix this problem in a way that also protects the interests of the communities served by Tribune."

The Teamsters' petition, filed on June 14, 2010, urges the FCC to deny Tribune's broadcast cross-ownership waiver requests and to deny Tribune's application for reorganization.

Alternatively, the petition asks the FCC to hold Tribune's requests in abeyance until Tribune's board has been reconstituted to give the employee owners a voice in the reorganization and the reconstituted board has had an opportunity to pass on the application.

Founded in 1903, the International Brotherhood of Teamsters represents more than 1.4 million hardworking men and women in the United States, Canada and Puerto Rico, including approximately 750 who work for Tribune and tens of thousands of members and retirees residing in the affected markets, including the markets for which cross-ownership waivers are being sought.

SOURCE International Brotherhood of Teamsters