What's a Tribune (NOW) Worth?

Forget Christmas; wait 'til Easter.

That essentially was Dennis Fitzsimons' message  as he  announced that the Tribune break-up or sale won't happen this year, but rather toward the end of the first quarter. He attributed the delay to the complexities involved in the potential transaction(s). Sure, it's complex. Assets that range from a newly challenged CareerBuilder to problematic TV stations to the Chandlers' former flagship L.A. Times to the Tribune's own tower and now to the grossly overcommitted sum of $136 million, pledged to Alfonso Soriano ( career on-base Percentage of .325). Soriano's contract now looks like it may outlive quite a few daily newspapers in this country of ours.

I'm inclined to believe Fitzsimons that the delay in sale -- remember the painful twisting of Knight Ridder in the wind, not very long ago? -- is in part due to that complexity and the related tax implications of what gets sold to whom when.

But the big question is simply this, again: What's a Newspaper Worth? What's a collection of newspapers, plus or minus the Cubbies, worth?

Two private equity owners came in with bids that underwhelmed, offering no premium on the current share price. That's no surprise. Again, it's entirely reminiscent of KR. Lots of noise, lots of positioning and in the end, McClatchy was the only company to pony up for the whole company (though it started parceling it out within hours of the purchase).  Think about it from a potential owner's viewpoint. You've got a business that is plainly flat-lining. Revenues for Tribune newspapers, as for industry, are no longer staying above water. They're not only below inflation; they're starting to trail last year's.  And online growth -- impressive as it is in the 30% category -- doesn't begin to make up for the print shortfall.

If you're a private equity owner, you're looking for a couple of things. You need a strong sense that some growth in revenue is out there, if you're willing to rejigger things and people.  Secondly,  you need to know you can cut costs significantly, while keeping the cash machine generating. But in the newspaper business, we're not seeing significant new revenue lines developing. In addition, the cutting has already accelerated, with the questions soon in front of companies of how much they can cut without doing damage to the current revenue streams. Readers, after all, are noticing the increase in wire copy, the shrinking of the page size and simply the fact of less news.

Remember that in the Tribune's case, it paid about $8 billion for Times Mirror in 2000, and today that's about what the whole company is worth. Value has vanished.

Then, take into account a few recent events, if you are a buyer -- whether Ron Burkle, David Geffen, Texas Pacific (or maybe even Alfonso Soriano (!?) ):

---Democrats just took the Congress. If Tribune ever thought it had a chance to finally get cross-ownership rules relaxed so that its grandfathered newspaper/radio holdings in Chicago, New York, Hartford and south Florida might be sold whole, that chance is now out the window. With break-ups of that cross-ownership, diminished value has diminished further.
---The recent Google deal in which newspaper companies, including the Tribune, have agreed to essentially let the Internet bogeyman broker its space, means that as far into the future as you can see, Tribune's properties will be sharing revenue they never had to share before.
---The pre-Turkey Day announcement of the long-awaited Yahoo/Six Amigos deal bolstered Yahoo Hot Jobs, reinvigorating a third-place recruitment player, just as CareerBuilder, Tribune's prized asset, had gotten some first-place traction in '06. The renewed HotJobs means tougher competition and more marketing costs for CareerBuilder.

Those events just occurred in the last month. So figuring out how much Tribune and its constituent parts are worth is a mind-bending exercise. No wonder Tribune's waiting for the Easter bunny to deliver the news of a sale.