Daily Double
October 28, 1999

Tribune Co.

Ticker: (NYSE: TRB)
Phone: 1-800-757-1694
Website: www.tribune.com
Price (10/27/99): $54 3/16

By Rick Aristotle Munarriz (TMF Edible)

How Did it Double?

The pitch. The crack of the bat. Fans are thinking long ball. Sammy Sosa is thinking long ball. He takes the wicked curve ball deep into center, but it falls shy of the hedge fence with a fierce bounce off the turf sending it out of play. Ground Rule Double. How apropos.

Tribune, the owner of Sammy Sosa's Chicago Cubs, is not what you'd expect from what many erroneously consider to be simply a newspaper company. The company has excelled in broadcasting, education, and the Internet.

While investors are waking up to the lucrative online portfolio of Tribune, the analysts are also realizing that they keep underselling Tribune's operating prowess. Tribune has topped earnings estimates during each of the first three quarters this year. With earnings growth to satisfy purists and impressive investments in new media to excite the revolutionaries, it's a whole new ball game for Tribune.

Business Description

Black and white and read all over, Tribune also owns other major newspapers, including The Orlando Sentinel. The company also operates four radio stations and 18 television stations -- chief among them Chicago superstation WGN-TV.

In the broadcast realm, Tribune owns a minority stake in the WB Network and the TV Food Network. The company has also been one of the earliest to fund online companies like America Online (NYSE: AOL) and Excite@Home (Nasdaq: ATHM).

Some wholly owned Internet entities, beyond its newspaper sites, include BlackVoices.com and Central Florida travel guide Go2Orlando.com. And, yes, the company even also sells supplemental educational materials.

Last month, shares of Tribune split 2-for-1.

Financial Facts

Income Statement
12-month sales: $3,159.0 million
12-month income: $413.1 million
12-month EPS: $1.47*
Profit Margin: 13.1%
Market Cap: $12,847.9 million
(*Excludes non-recurring items)

Balance Sheet
Cash: $1,194.8 million
Current Assets: $2,122.6 million
Current Liabilities: $790.5 million
Long-term Debt: $2,379.1 million

Price-to-earnings: 36.9
Price-to-sales: 4.1

How Could You Have Found This Double?

What do Tribune, Apple Computer (Nasdaq: AAPL) and CMGI (Nasdaq: CMGI) have in common? They were all early investors in America Online -- and they all began to cash out way too soon. Then again, all three companies have fared well in the eyes of Wall Street.

That seems to be the side to Tribune that most don't see. This is no stodgy newspaper company leaving investors with ink stains on their hands and a bad taste in their mouths. Tribune is the company that approached a young Internet search engine in need of capital called Excite. It is a company that has accumulated stakes of, if not owned outright, geographically relevant websites backed by its portfolio of print publications, as well as sites like BlackVoices and iVillage (Nasdaq: IVIL).

Offline, diversification has become necessary. Broadcaster CBS (NYSE: CBS) has gone on to build up a decent collection Internet stakes. While Tribune is selling school texts and now owns a piece of VaristyBooks.com, Washington Post (NYSE: WPO) actually owns educational centers.

So finding Tribune, and its dynamic cyberlife, has been as simple as keeping up with press releases. Even companies like Peapod (Nasdaq: PPOD) and Food.com have turned to Tribune as a sugar daddy.

Where to From Here?

We still haven't even covered all of Tribune's online connections. Through its Classified Ventures partnership, the company claims a piece of automobile buying portal Cars.com.

Life is going well for Tribune on all fronts. The company has achieved improving performance in all its business segments. The WB Network, once assumed broadcasting overkill, has found a niche with hits like Buffy the Vampire Slayer and has scored big with the syndicated Friends reruns.

But let's close things out where we started -- baseball. It's World Series time and neither the Atlanta Braves nor the New York Yankees call Chicago home. However, because the excitement generated last year as Sammy Sosa and Mark McGwire shattered homer marks was sustained this season, the Cubs filled up the bleachers and the games broadcast nationally on WGN found renewed interest.

The company behind the Cubs, a baseball team that until a few years ago figured playing a night game would be heresy, is now in the spotlight. It has earned it in many ways.

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