Friday, October 19, 2007 0 comments ++[ CLICK TO COMMENT ]++

Tribune Under Discussion at the FCC

(Update: Here is a detailed article by New York Times on what the FCC is doing)

I haven't posted much lately since I didn't find anything worth posting. The markets are selling off, with big time weakness in financials, and I wonder if this is the start of a big correction or not. Oil prices are hitting highs and at some point they should start impacting the economy.

Anyway, it looks like Tribune (TRB) is under discussion at the FCC.

Commission Chairman Kevin Martin, a Republican, this week said he wants to resolve by December whether to ease restrictions on how many media properties a company can own in a single market...

But FCC Commissioner Michael Copps, a Democrat, on Thursday said Chairman Martin "has indicated he won't grant any waivers pending a vote on major revisions of the commission's media ownership rules," the paper said.

""To say we have to change the media ownership rules so we can get the Tribune deal done does not strike me as ... a good way to make public policy," the paper quoted Copps as saying.

The biggest risk with the Tribune deal is FCC approval (the second biggest risk is banks not being able to finance the deal; chance of Zell backing out is close to zero). Obviously I, being a shareholder banking on the takeover, is hoping the FCC acts in Tribune's favour. The expectation is that some Democrats will be hesitant to vote for easing the media ownership rules while the Republicans are in favour. Ignoring my vested interest, I personally think it's about time the government got rid of cross-ownership restrictions. Newspapers and radio are struggling, and television is next. The media landscape has changed so much that these companies aren't as powerful as they were in the 1900's. Based on the referenced article, it looks like the FCC decision will be made in December.

The stock is down 5% today (I suspect partly due to this news and partly due to the weak market) and I'll be adding whenever I can save up some money. As I indicated before, I'm thinking of selling my US Treasury ETF (TLT) and buying TRB. The long bonds have rallied sharply in the last few days. The futures, which are generally not very good at predicting things, have something like a 70% chance of another Federal Reserve rate cut during the October meeting (it jumped from something like a 40% chance last week to 70% now).

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