November 2007

The following statement can be attributed to Benton Foundation Chairman and CEO Charles Benton:

The season of giving began early this year when FCC Chairman Kevin Martin gave a gift worth hundreds of million of dollars to billionaire Sam Zell and the Tribune Company. For the public, however, the decision is the equivalent of three lumps of coal.

There are at least three ways the Tribune sale will negatively impact the public:

1) Jeopardizing the Tribune's delivery of quality news and information: The sale will result in $13 billion debt load for the Tribune, generating economic pressures that may result in layoffs. The media industry has established a pattern of targeting news departments for downsizing when they restructure, making it ever more difficult for news departments to thoroughly and accurately cover the stories that matters to local communities. In fact, shortly after announcing the sale, Tribune announced 250 job cuts in Chicago and Los Angeles. Moreover, according to the Chicago Tribune, Zell has “little background in media and none in journalism,” which could negatively impact the company's historical commitment to journalism.

2)Lost tax revenue: The sale represents a complex corporate restructuring that would allow Tribune to eliminate most of its corporate taxes.

3) Slighting labor: Tribune will not have employee representation on the board of directors. According to the employee's union, "If given a chance, Tribune employee-owners could play a crucial role in enhancing localism and diversity for the benefit of the public served by the Tribune."

The Tribune's request for waivers are based entirely on a claim that the waivers are needed to minimize burdens on Tribune. Its motive for seeking these waivers is entirely
self-serving. Tribune rejected bona fide offers to sell itself because it preferred a particular tax favored restructuring that maximized benefits for its existing shareholders.

But the FCC’s job is not to intervene in the market to protect the private interests of those who volunteer to be FCC licensees. Rather, its job is to enforce its rules and policies designed to promote the public interest. Today, the FCC failed in that role.