Tribune sale could be getting complicated

The newspapers themselves, including the LAT, have been valued at up to $1 billion, but that doesn't include Tribune's financial ties to CareerBuilder and Classified Ventures, two big sources of revenue. Trouble is, if the Tribune papers are sold, the new owners might have to rework the contractual arrangements with the other investors of those companies - probably on less favorable terms - and that could bring down the sale value. Tribune has yet to distribute financials to interested bidders in the newspaper group, despite plans to do so last month. No one is explaining the holdup. From the WSJ:

Several people with knowledge of the situation say a sale could undermine part of the websites' value to the papers: the ad revenue generated when the papers' sales forces sell space on the sites. Two industry executives with knowledge of the arrangements said the rights to those Web ad sales could be worth around 10% of Tribune's newspaper sales and profit. A sale of Tribune's newspapers would likely dissolve those rights, say the people. Any buyer of the Tribune newspapers would have to renegotiate the so-called affiliate rights agreements with the digital properties' other owners, they say, in what amounts to a cumbersome process at best.

From Crain's Chicago Business:

The Tribune, along with other newspaper companies, invested in the digital ventures in the late 1990s in hopes that as classified ad dollars shifted online the papers would retain some of that income by way of the sites, which include Cars.com and Apartments.com. As part of their investments, the papers entered affiliation agreements with CareerBuilder and Classified Ventures that entitled them to a portion of income from the sites in certain markets. Tribune is the largest Classified Ventures stakeholder, with 28 percent, and shares ownership of that company with Washington Post Co., McLean, Va.-based Gannett Co., Sacramento, Calif.-based McClatchy Co. and Dallas-based A.H. Belo Corp. CareerBuilder is owned by Tribune, Gannett and McClatchy.