Tribune Co. Hopes to Trade Van Nuys Paper

Tribune Co., the Chicago media firm that publishes eight newspapers including the Daily News in Van Nuys, said Monday that it now hopes to trade the Daily News to another media company after it completes its proposed $510-million purchase of KTLA-Channel 5 later this year.

The announcement, which Tribune Co. made while revealing the financing terms for its KTLA purchase, suggests that the company expects it will fail in its bid to keep the Daily News by winning an exemption from federal media cross-ownership regulations.

Federal Communications Commission rules prohibit media companies from buying two different media outlets in the same market.

Considering Sale

Tribune Co. bought the Daily News in 1973 as a four-times-a-week paper with free circulation and built it into a daily with paid circulation of 145,000.

In its announcement, the company also said it was considering selling all of its cable operations--not just the two cable systems in Southern California affected by the KTLA deal. The company said it was approached about selling its 205,000-subscriber cable operations by Douglas H. Dittrick, president of its Tribune Cable Communications and a 10% stockholder in its cable system.

If Tribune Co. were to go through with such a deal, it would become one of the first of the major media companies to retreat altogether from the cable arena. Cable television, brimming with promise of heavy profits just a few years ago, has proven slower to develop than advocates predicted.

Tribune Co.’s cable operations in Southern California are located in Lakeland Village and Lancaster and have 39,000 basic subscribers.

As far as the future of the Daily News, the company said it has not yet formally abandoned its request, filed last month and still awaiting hearing, for an exemption to FCC rules on cross ownership. Instead, the company said in a prepared statement that it “is required to sell its newspaper in Los Angeles” and now “intends to pursue a swap of the Daily News for a comparable newspaper or newspapers as an alternative to a cash sale.”

Thomas E. Griffiths, vice president of the Daily News, said Monday that the paper “is going to take a wait-and-see attitude” regarding any plans to sell or trade.

Tribune spokesman Joseph Hays said the company has had “several expressions of interest” from “both domestic and foreign” interests in the Daily News.

Tribune Co. also announced detailed plans to finance the KTLA purchase. The company said it will issue $100 million in Eurodollar debt. The 10.5% notes will come due in 1995. A group led by Salomon Bros. International and Merrill Lynch Capital Markets will manage the offering.

The company also will assume a $170-million note issued to KTLA’s current owner, Golden West Television, when it bought KTLA in 1983. Assuming the note will reduce the amount of cash that Tribune Co. will pay Golden West.

In addition, Tribune Co. will privately sell about $240 million in short-term notes backed by revolving bank credit.