The price tag for the Tribune Studios complex, known to many as “Tara,” is 125 million as Tribune Company under Sam Zell seeks to clean up its balance sheet by offloading unnecessary assets. Further avoiding any tax liability, Zell will use the proceeds in a like-kind exchange for Tribune to exercise its option to buy real estate associated with some of its big newspapers for 175 million.
The purchase of the newspaper-related real estate will also allow Tribune to exit one of its remaining entanglements with the Chandler family, which had controlled Times Mirror before its merger with Tribune and had been a driving force in seeking a sale of Tribune, leading to the sale to Zell and an Employee Stock Ownership Plan. Tribune had cut a deal in 2006 to restructure the real estate partnerships with the Chandlers and received an option to buy the real estate from two partnerships, known as TMCT and owned 95% by the Chandlers, for 175 million. The date for exercise of that option was January 2008, so Zell, who made his billions in real estate, had a clear target for getting the LA studio deal done as well.
Tribune announced in August that it was putting Tribune Studios up for sale (8/31/07 RBR #171). Tribune had owned the 10.5-acre studio complex, the original Warner Brothers studio, since 1988. Much of it is leased out for various productions. Tribune’s KTLA-TV (Ch. 5, CW) will remain at the site through 2012 under a five-year lease with the acquirer, Hudson Capital.