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Tribune spins off newspapers into separate company

NEW YORK — After spending years in the shadows of bankruptcy proceedings, management turmoil, and its more prominent broadcasting stations, Tribune Co.’s publishing division, including well-known newspapers like the Los Angeles Times and Chicago Tribune, is striking out on its own.

The print properties are being spun off into a new company, Tribune Publishing, which starts trading on the New York Stock Exchange under the symbol TPUB on Tuesday.

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The parent Tribune Co. plans to continue as essentially a television business, having accumulated 42 TV stations.

Tribune Publishing will be born in a punishing print environment, but it will start off with just $350 million in debt, of which $275 million will pay a one-time cash dividend to Tribune’s shareholders. That falls far short of the enviable $2 billion cash cushion Rupert Murdoch’s News Corp. gave its print division last year, but far better than the $1.3 billion in debt that Time Inc. started with when it was spun off in June.

Analysts say the debt load is reasonable. Bloomberg reports that in early trading, the pre-spinoff price is $22 a share, giving it a market capitalization of $528 million.

Looking forward, Jack Griffin, the new company’s chief executive, said he plans to build far beyond the company’s potential in print.

“We will be a company that has a greater percentage of its revenue coming from digital sources,” Griffin said last week.

The spinoff represents a fresh start for Tribune’s newspapers after a tumultuous four-year bankruptcy process that ended early last year. What followed was a period of uncertainty when its newspapers appeared to be in play, and potential buyers like the Koch brothers expressed interest. But eventually Tribune decided to keep the publishing assets and form a new company.

Tribune Publishing’s success depends heavily on Griffin, a media executive with a long history in newspapers and magazines, along with a fair share of enemies from his brief tenure running Time Inc.

Griffin’s career is a mix of success and stumbles. He fared well at the magazine company Meredith, where he served as president of the national media group from 2004 to 2010.

Meredith’s revenues grew from $808 million in 2003 to $1.27 billion in 2008 before the recession hit, said Barry L. Lucas, senior vice president for research at Gabelli & Co.

He was less successful when he joined Time Inc. in 2010 as its first chief executive from outside the company. Colleagues called Griffin’s management style brusque. Griffin was also criticized by some Time Inc. employees for prizing loyalty in employees over talent.

Now Griffin is tasked with increasing profits for the company’s eight major papers, which also in addition to the Chicago and Los Angeles newspapers include the Hartford Courant; two Florida newspapers, the Sun Sentinel in Fort Lauderdale and the Orlando Sentinel; and the Baltimore Sun. These businesses drive most of Tribune Publishing’s overall revenue, which totaled $1.8 billion in 2013.

But Tribune is also gradually shifting its emphasis away from advertising revenue to circulation, with plans to attract digital-only subscribers and have more digital-only pricing.

Griffin also sees growth potential in the company’s smaller businesses, which work directly with companies on advertising and marketing as well as helping them manage social media and create custom video.

Still, in 2013, these businesses, including direct mail services and printing and delivering other newspapers, generated just 17 percent of Tribune’s total revenue.

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