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Tribune Co. Expands Multimedia Strategy with $8-Billion Acquisition of Times Mirror Co.

Strategic Insights

— 1 min read

The acquisition of Times Mirror Co. by Tribune Co. for $8 billion represents a significant step in Tribune's multimedia strategy, establishing the company as a national player in the advertising, information, and news industries. The deal brings together newspapers, television stations, and Internet ventures under one umbrella, with Chicago, Los Angeles, and New York serving as the foundation for the new company. Tribune executives are optimistic about the potential for increased cash flow, with an estimated $120 million in incremental revenue expected in 2001.

Key Takeaways:

  • Tribune's acquisition of Times Mirror Co. creates a national multimedia network with a combined portfolio of newspapers, television stations, and Internet ventures.
  • The deal is expected to generate $120 million in incremental cash flow in 2001 through the combination of properties and cross-selling opportunities.
  • Tribune will leverage its blueprint for media operations developed in Chicago, where a range of media operations are offered singly or in packages to advertisers, and content generated by those properties finds multiple uses.
  • The acquisition signals Tribune's intention to become a national multimedia player, with the chairman, President, and CEO John W. Madigan stating that the company is putting together "muscle and might" that it believes no one else has.
  • Tribune's partnerships with WPIX-TV, Newsday, and the Los Angeles Times are expected to create powerful synergies, with potential multimedia desks and revenue streams generated by cross-selling opportunities.
  • The acquisition also presents opportunities for Tribune to shed non-core assets, including its underperforming education division and a magazine division that includes Popular Science and Field & Stream.

Statistics:

  • $8 billion: The value of the acquisition of Times Mirror Co. by Tribune Co.
  • $120 million: The estimated incremental cash flow expected in 2001 through the combination of properties.
  • $90 million annual cash flow: The estimated annual cash flow generated by Jeppesen Sanderson Inc., a Times Mirror holding.
  • $2 billion: The estimated value of non-core assets, including the education division, magazine holdings, and Jeppesen Sanderson, that Tribune could sell off.
  • $900 million: The estimated 2001 free cash flow produced by the merged companies.

Sources:

  • " Tribune to Acquire Times Mirror in $8-Billion Deal"
  • " Tribune Expands Multimedia Strategy with Acquisitions"
  • " Tribune Chairman Sees Largest Acquisition in Company's History as Major Step"
  • " Tribune Eyes $120 Million in Extra Cash Flow from Times Mirror"

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