Sam Zell is trying to save potential fees and tax benefits by getting the Tribune privatization done by year’s end. His crew is said to be "bafffled" at the unforeseen resistance coming from FCC Chairman Kevin Martin. So says an article in the Chicago Tribune itself. Zell will need a twenty day window between final approval of financing and closure, so even if the FCC were to approve Martin’s plan on December 18 it would not be soon enough for the Tribune deal to move forward.
In short, Zell needs waivers in place to keep the company’s existing broadcast/print combinations together. But Martin has balked at issuing them. Former FCC Chairman Reed Hundt speculated that the large numbers of waivered combinations out there make a mockery of the rules against them, and Martin is avoiding giving his opponents new waivers to use as an argument against the relaxation of the rules; and that he’s avoiding issuing waivers to force the issue (a tactic Hundt applauded as a necessary tool in an FCC chair’s belt).
RBR/TVBR observation: The rule change, or at least the timetable for it, may be in trouble anyway. It has attracted almost no unqualified support that we’re aware of, instead drawing attacks from all sides, including those who think it goes to far and those who think it does not go far enough. It faces threatened stalling action from Capitol Hill and is a strong bet to head back to court, one way or the other. The issue is far from decided, and likely will still be far from decided, on 12/18/08. Tribune should not be held hostage, as even Democratic Commissioners Michael Copps and Jonathan Adelstein have said. Zell should be able to pursue his proposed transaction based on its merits, not Kevin Martin’s tactical needs.