Tribune Co. is taking over Times Mirror Co. and its flagship newspaper, the Los Angeles Times, creating the nation's third-largest newspaper company, the Times reported Monday.
The $6.46 billion transaction will mark the end of Times Mirror as a company and of a newspaper dynasty that has owned or controlled the Los Angeles Times since 1882. The Chandler family, which owns 66 percent of voting shares, will vote in favor of the deal, the Times reported.
The combined daily newspaper circulation of the merged companies would be 3.6 million, ranking it behind Gannett Co. Inc. and Knight Ridder.
The deal may require permission from the Federal Communications Commission since FCC rules do not allow a company to own both a TV station and a newspaper in the same market without a waiver.
Tribune Co. would control operations of the combined companies, including the Los Angeles Times, from its Chicago headquarters, the Chicago Tribune said in its Internet edition Monday.
Times Mirror has undergone major changes the past five years under the stewardship of its chief executive, Mark H. Willes. After arriving in spring 1995, he closed The Baltimore Evening Sun and New York Newsday and sold off assets that substantially trimmed the company.
The approach boosted the company's stock -- from $23.25 in June 1995 to a high of $72.62 in November 1999 -- and Willes pledged more growth, particularly in the highly competitive Los Angeles market.
But over the past 18 months, circulation growth was disappointing and profits lower than expected. By Friday, the stock had fallen to $47.94, a 52-week low.
Under the new deal, Times Mirror shareholders will have a choice of taking $95 per share from Tribune Co. or exchanging each of their Times Mirror shares for 2.5 shares of Tribune Co. stock.
In December, the Los Angeles Times was embarrassed by the disclosure of a revenue-sharing deal with the Staples Center sports arena. Under the arrangement, the two would share advertising profits from an issue of the newspaper's Sunday magazine devoted to the center's opening.
The brunt of criticism for the deal fell on Willes' protege, Times Publisher Kathryn M. Downing, and Editor Michael Parks. But many saw it as the result of Willes' campaign to break down walls between business and news departments as a way to build the newspaper.
Willes told the Times that he would not stay past the transition to complete the deal. Downing said she does not intend to resign.
The merged companies would include 11 daily newspapers, 22 television stations and a combined market value of $11.7 billion, The New York Times reported in Monday's editions.
In addition to the Los Angeles Times, Times Mirror publishes Newsday of Long Island, N.Y.; The Baltimore Sun; The Hartford Courant; The Morning Call> of Pennsylvania; and The (Stamford) Advocate and Greenwich Time of Connecticut.
More than 60 million people read Times Mirror magazines, including Field & Stream, Popular Science, GOLF Magazine, Outdoor Life, SKI Magazine and SKATEboarding.
The Tribune company reported 1999 revenues of $3.2 billion and has about 13,400 employees. Tribune Broadcasting owns and operates 22 major market television stations and reaches more than 75 percent of U.S. television households.
The company also owns and operates four radio stations, including three stations in Denver and WGN-AM in Chicago. Tribune Entertainment, a subsidiary, develops and distributes TV programming.
In addition, the company owns the Chicago Cubs baseball team. Tribune Publishing publishes four market-leading newspapers: the Chicago Tribune, the South Florida-based Sun-Sentinel, The Orlando Sentinel and the Hampton Roads (Va.)-based Daily Press.
©2000 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed
© 2000 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.