October 31, 2007

(Washington, D.C.) -- The International Brotherhood of Teamsters testified at today’s Federal Communications Commission (FCC) hearing regarding diversity and localism in media ownership, raising concerns about the separation of ownership and management under applications filed by the Tribune Company [NYSE: TRB]. The union also held a rally outside the hearing in support of public interest protections.

Applications by the Tribune Company for transfer of ownership and waivers of the FCC’s newspaper/broadcast cross-ownership rules are pending before the FCC. The proposed transaction would transfer 100 percent of the company’s ownership to an Employee Stock Ownership Plan (ESOP), but give employees no voice in the governance of the plan or the operating company. Rather, total control of the company would reside with its new chairman, Sam Zell.

George Tedeschi, Teamsters International Vice President and President of the Graphic Communications Conference of the Teamsters, testified at the hearing on behalf of 2,000 Teamster-represented Tribune employees.

"Section 310(d) of the FCC’s rules forbids a broadcast licensee from giving third parties ultimate control over station personnel, programming, and finances," Tedeschi said. "In other words, the owners of a station must be the ones who have ultimate management responsibility for the station. The Tribune-Zell transaction calls this rule into question."

• Zell clearly would control the Tribune, but he would not be an owner. Although a trust established for the benefit of his family would hold notes and warrants and would have the right to designate two of nine members of the Tribune’s board, neither Zell nor his family trust would be owners of Tribune stock.
• The ostensible owners of the Tribune would be the Tribune’s employees, as beneficiaries of the Tribune ESOP Plan that would hold 100 percent of the Tribune’s stock. But as proposed, the employees would have no role in the selection of the Tribune’s directors, who establish company policy and appoint the officers who run the company; and would have no opportunity or ability to select the Tribune ESOP Plan trustee

“This separation of ownership and management is unprecedented and would set a new, and very low, standard for compliance with the Communications Act’s public interest requirements, which are the basis for the localism and diversity principles in broadcasting,” Tedeschi said.

Teamsters General President Jim Hoffa called on the FCC to ensure protections for the public interest in any action on the Tribune Company waiver requests. “By rubberstamping the Tribune application, the FCC could violate its own rules and policies which forbid a broadcast company from giving ultimate control to an unaccountable third party,” Hoffa said.

Founded in 1903, the International Brotherhood of Teamsters represents 1.4 million hardworking men and women in the United States, Canada and Puerto Rico.