Tribune to Buy 2 WB Stations From Acme
Tribune Co. agreed to buy two television stations for $275 million in cash and other assets in a move that would make it the largest owner of WB Network affiliates.
The purchase of Acme Communications Inc.'s WB-linked stations in Portland, Ore., and St. Louis would increase the media company’s holdings to 26 TV stations, including 19 WB affiliates, Tribune said.
Tribune, which owns 22.5% of the WB, also owns the Los Angeles Times.
Acme, a Santa Ana-based company headed by AOL Time Warner Inc. executive and WB founder Jamie Kellner, said proceeds of the deal would help slash its debt to $11 million to $15 million.
With the close of all pending transactions, Acme said it would own nine TV stations in mid-size markets, including eight WB affiliates.
Last month, sources disclosed that AOL -- the WB’s majority owner -- had agreed to pay Kellner and eight other WB founding executives nearly $110 million for their 11% stake in the network.
AOL executives said the arrangement had been negotiated in the spring of 2001 as part of Kellner’s promotion to his current job as chief executive of AOL’s Turner Broadcasting System unit.
The buyout was intended to prevent Kellner, who founded the WB in 1995 with Time Warner, from having conflicts of interest that could arise from his new role overseeing both the WB and a group of cable channels, including CNN, TBS, TNT and the Cartoon Network.
AOL executives feared that without the buyout, Kellner would have a financial incentive to funnel the best programming to the WB.
The deal comes as Acme, named for the fictitious manufacturer of explosives and gadgets used in Warner Bros.’ Road Runner cartoons, is struggling for profitability. For the nine months ended Sept. 30, Acme reported a net loss of $48.7 million, contrasted with a net loss of $19.9 million for the same period a year earlier.
Acme shares rose 72 cents to $8 on Nasdaq. Tribune shares closed up 97 cents to $45.44 on the New York Stock Exchange.
Times wire services were used in compiling this report.