Media company begins a new era

The new chairman has vowed to ‘rearrange’ the staid Tribune Co. for the 21st century. But how? For starters, he brought five fresh faces onto the board to replace what he called ‘burghers’ from Chicago’s business and social elite. He gave the maverick owner of the Las Vegas Sun and Vegas.com a stake in the business. And his chief broadcast deputy inked a deal with another TV station group. That was Day 1.

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-- Tribune Co.’s historic $8.2-billion buyout barely had time to close Thursday before the company announced its first deal -- a joint management agreement with the suburban Cincinnati chain of TV stations that was home to Tribune’s new broadcasting and interactive chief, Randy Michaels.

Under the deal, a newly created Tribune subsidiary will provide administrative and back-office support as well as advertising sales and other services to Tribune’s 23 TV stations and the nine middle-market stations owned by Michaels’ former company, Local TV of Covington, Ky.

The arrangement enables Tribune and Local TV to cut overhead, share ideas and sell advertising across a broader group of broadcast outlets, Michaels said Thursday.

Such practices are not uncommon in the broadcast industry. Several local newspapers and radio and TV stations operate under joint sales or local management agreements, in which their ad sales and sometimes even their news gathering are handled by another outlet in the same market.

Michaels hinted that another avenue of growth for the new enterprise was on the horizon.

He would not comment further, but one broadcast executive said late Thursday that Oak Hill Capital Partners, the private equity firm that controls Local TV, was in exclusive negotiations with News Corp.’s Fox TV to buy nine Fox-owned and -operated stations. That person and another source said the two sides were close to reaching a deal.

The stations, in Denver, Cleveland, Kansas City, Mo., and elsewhere, could fetch more than $1 billion, analyst Richard Greenfield of Pali Capital estimated in June.

Michaels, speaking hypothetically about the future of the new management company, said if Local TV expanded it would create a broader base across which to share services and sell ads, potentially increasing efficiency and boosting revenue.

For Tribune, burdened with debt from the buyout and suffering from an advertising recession, finding new ways to generate revenue is a top priority.

Michaels resigned Thursday as chief executive of Local TV to join his longtime associate Sam Zell, Tribune’s new chairman and CEO. Michaels retains an investment in Local TV, where he was succeeded as CEO by business partner Bobby Lawrence.

With the irreverence that characterizes both Michaels and Zell, the new venture is being named the Other Company. Michaels will head it while carrying out his duties as Tribune executive vice president and CEO of broadcasting and interactive.

“Tribune and Local TV expect to realize significant savings in management, technology and other overhead costs,” Michaels said in a statement. “Things like research and development and automation technology are more efficient on a large platform.”

Eventually, he said, the Other Company could offer its services to broadcasters outside the Tribune-Local TV fold.

Michaels was moving quickly Thursday. He said he formally quit his post at Local TV around 11 a.m., less than two hours before the Tribune buyout was completed. He attended Zell’s 2:30 p.m. news conference to announce the buyout but rushed out afterward to conclude the agreement with Local TV.

thomas.mulligan@latimes.com

meg.james@latimes.com