Obstacles Remain in the Way of Tribune Deal

03/28/2008 02:44 am ET | Updated May 25, 2011

Cheer up, Wall Street Journalers! In the world of waiting-to-see-how-a-big-media-mogul's-bid-for-your-company will-affect-your-future, you are not alone! Your colleagues over at Tribune Company are still sweating out the attendant obstacles that remain in the way of real estate tycoon Sam Zell's bid for their company.

The issues in each case couldn't be more distinct. Chief among the sticking points for Zell is that Wall Street isn't nearly as optimistic about the outcome as they are in the case of Murdoch and Dow Jones. Ever since Murdoch made his $60-a-share play, the value of DJ has trended upwards, as if magnetized. Some speculate that in the end, Murdoch may have to go as high as $65-a-share to seal the deal. By contrast, Tribune stock has vacillated. Since peaking in May at $33.20, the share price has fallen as far as $29.25, closing Tuesday at $30.14.

But the largest obstacle remains a regulatory one. Yes, believe it or not, outside the world of Rupert Murdoch being able to do seemingly whatever he pleases are rules and regulations which can serve--at least nominally--as a check to the ambitions of the merely mortal media mogul. Zell is hoping he can reach a deal by the end of the year, but first, he will have to obtain waivers from the FCC that will allow him to maintain ownership of television stations in cities serviced by Tribune. Current regulations prohibit this, but those rules are currently being debated, and Zell doesn't want to part with properties that may end up being permissible.

As the Los Angeles Times notes, the "waivers normally would be routine because business-friendly Republicans control the FCC." But with the Democrats in power, and with "liberal activist groups" advocating ownership restraint, the current political terrain is trickier to traverse. Which isn't to say that Zell-happy Tribune executives aren't trying:

Company executives have successfully pushed key congressional Democrats -- including two from Tribune's home state -- to signal to FCC Chairman Kevin J. Martin that he wouldn't face a major backlash on Capitol Hill if the waivers were granted.

"Successful push?" Yeah. That could mean a lot of things. One thing we've learned from Murdoch, though, is that it's possible to form some interesting alliances if you're only willing to pay the price.

In related news, barring a last-second reprieve from our esteemed editor, this will be the first Eat The Press posting on Sam Zell to not feature a witty pun on his name.

Tribune faces key tests to seal deal [Los Angeles Times]