The company best known for the 10 daily newspapers it publishes, including the Chicago Tribune, the Orlando Sentinel, the Baltimore Sun, and the Los Angeles Times, can’t wait to get out of the newspaper business.

Last December, the Tribune Company, the second largest newspaper publisher in the country, emerged from bankruptcy without its $13 billion debt and old owners. Now in charge: the same Wall Street banks that lent the company billions to go private. Two months after assuming control, Tribune’s new owners hired Evercore Partners and J.P. Morgan to oversee the dumping of Tribune’s newspaper portfolio.

Founded in 1847 with the launch of the Chicago Tribune, 166 years later the Tribune Company was finished with print news, probably for good.

Investment bank and now owner

Today’s Tribune, controlled by Oaktree Capital Management, best known for investing in “distressed” companies, JPMorgan Chase, a Wall Street investment firm, and Angelo, Gordon & Co., a hedge fund sponsor best known for helping the U.S. government deal with the toxic assets accumulated by banks that helped trigger The Great Recession, want into the television business instead.

Tribune, which already owned 23 local television stations including flagship WGN in Chicago, bought another 19 Monday in a deal estimated to be worth at least $2.7 billion.

The stations were acquired from Local TV Holdings, itself owned and controlled by Wall Street investment firm Oak Hill Capital Partners, founded by Texas oil billionaire Robert Bass. Oak Hill acquired the television outlets from The New York Times and News Corp., in two prior deals. Tribune won’t pay for the stations outright. It is financing the deal with a $4.1 billion credit line granted by banks including JPMorgan Chase and Citigroup.

The stations involved:

Assuming the deal meets the approval of the Federal Communications Commission, Tribune will control 42 stations in 16 markets, including New York, Los Angeles, and Miami.

It expects to pay off the loans and generate returns from the “significant free cash flow” generated by the stations.

Where will that cash flow originate? From pay television subscribers asked to pay a growing amount each year for the formerly “free TV” stations.

“Smaller players feel like they’re losing their way with pay-TV providers and broadcast networks,” Craig Huber, analyst at Huber Research Partners, told USA Today. “They feel like they’re at a disadvantage here unless they size up.”

As cable programming rates continue to increase and subscribers threaten to cut the cord, pay television providers have been more willing to play hardball and kick stations off the cable or satellite dial when they cannot reach a retransmission consent agreement.

With up to 90 percent of a station’s viewership coming from pay television platforms, a lengthy standoff can destroy a station’s primary source of income: advertising revenue.

To protect themselves, television station owners are retaliating by threatening providers with the loss of all of their stations across the country, not just one or two. The resulting subscriber uproar could prove politically difficult and threaten customer relationships with providers. The more stations a company controls, the bigger the threat it can pose to Comcast, DirecTV, AT&T and other national providers.

Tribune is not alone bulking up the number of stations they own and control. Last month Gannett nearly doubled its portfolio from 23 to 43 stations with the acquisition of Belo’s TV stations for $1.5 billion in cash and agreeing to cover $715 million in accumulated debt.

Sinclair Broadcast Group, already the largest local TV station owner in the country, has gotten even larger with the purchase of four TV stations owned by Titan TV Broadcast Group. If the deal is approved, Sinclair will own 140 stations in 72 markets. In some cities, Sinclair will nominally own or control up to five local stations.

Sinclair management is well-known for injecting conservative political viewpoints into local newscasts and programming decisions. In 2004, two weeks before the presidential election, Sinclair ordered all of its television stations to air propaganda critical of Democratic candidate John Kerry. Later that year, Sinclair ordered its ABC affiliated stations not to broadcast a “Nightline” episode about soldiers killed in the Iraq war, fearing it would turn the public against the war.

But for most owners, politics has nothing to do with the desire to supersize. It’s a matter of money.

Even smaller station groups are now consolidating. Media General and New Young Broadcasting Holding, are merging their combined 30 stations.

(Image: The Wall Street Journal)

Critics worry the changing landscape of local television will threaten the concept of “local service” stations are required to provide as a condition of their broadcast license. A station owner that lives and works in the community served is becoming an increasing rarity, and the Federal Communications Commission has allowed stations that used to fiercely compete for local news viewers to now “share resources.” Many stations, especially those owned by out of area investment banks, have discontinued local news altogether in cost-savings maneuvers.

“This deal adds to a blizzard of broadcast industry consolidation that is poised to leave America’s media system less local, less diverse and less accountable to the people in these communities,” said Free Press’ Craig Aaron in a statement on the deal. “By the time all these deals are done, a handful of companies could control almost all of the network affiliates in major markets and swing states. Local broadcasts are becoming simulcasts, with the same cookie-cutter content piped in from distant corporate headquarters, once-competitive stations combined into single newsrooms and fewer journalists forced to fill more hours of airtime.”

“The FCC needs to wake up to what’s happening on local TV,” said Aaron. “Wall Street may be overjoyed at this merger mania, but the rest of us should be very worried about having fewer viewpoints on the air and fewer reporters on the beat.”

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Former FCC commissioner Michael Copps shares his concerns about media consolidation 2013.mp4[/flv]

Former FCC commissioner Michael Copps shares his concerns about increasing media consolidation and its impact on an informed electorate. (Aired on Carolina Journal Radio May 23, 2013) (1 minute)

Sean Combs’ Revolt TV will be appearing on your Time Warner Cable lineup whether you want it or not.

The network, projected to launch this fall, is one of four African-American independent cable networks that Comcast pledged to carry as a pre-condition for its merger with NBCUniversal. Time Warner Cable is coming along for the ride, agreeing to launch the channel across all of its cable systems nationwide.

Most of Revolt’s programming is expected to be music programming targeting an urban audience.

Between Comcast and TWC, Revolt will launch in 25 million homes, which is an accomplishment for a network nobody heard of and few asked to receive.

“This is a landmark distribution deal that demonstrates Time Warner Cable’s commitment to bringing a platform for music artists and fans to their subscribers,” said Combs, Revolt’s founder and chairman. “It positions Revolt to come out of the gate strong, and we look forward to igniting the passion of initial audiences across the U.S.”

Discussions with other providers are ongoing, so expect the network to eventually also end on other cable, satellite, and telco-TV systems.

Neither cable company disclosed exactly how much the new network will cost each cable subscriber.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Revolt TV Launch Promo 6-13.flv[/flv]

Sean Combs’ appears in this launch promotional video for Revolt, which will target an African-American audience when it launches this fall. (Warning: Profanity) (1 minute)

Time Warner Cable’s decision to spend $11 billion to broadcast Los Angeles Lakers and Dodgers games at an estimated cost of $50-60 a year per subscriber is the subject of a class action lawsuit from fed up customers.

The plaintiffs are upset cable subscribers across Southern California will have to cover the cost of the 20-year deal with no option to opt-out of the sports channels because they are bundled into the most popular cable package.

The suit, filed this week in Superior Court alleges at least 60 percent of subscribers have no interest in the sports programming, but will collectively cover $6.6 billion of the deal and never watch a single game.

Time Warner Cable is also accused of forcing AT&T U-verse, Charter Cable, Cox Cable, DirecTV and Verizon FiOS to sign restrictive contracts that compel the companies to include the sports channels on the basic lineup.

Ironically, Time Warner Cable itself regularly complains about the increasing cost of programming and contract terms that force it to bundle expensive sports channels inside the basic tier instead of offering customers optional, added-cost sports programming packages.

Both sports teams are also named as defendants in the suit because they were aware that all subscribers would face rate increases as a result of the deal.

“TWC’s bundling results in Defendants making huge profits, much of which is extracted from unwilling consumers who have no opportunity to delete unwanted telecasts,” the complaint states.

The suit claims there is no legitimate reason Time Warner Cable and the sports teams could not have offered the new networks only to customers that wished to pay for them. The suit wants the bundling of the sports networks stopped and customers given refunds for the higher television bills that resulted.

We saved the only good part.

The best part of Cablevision’s latest ridiculous advertising campaign is the 12-month introductory price new subscribers will pay for phone, broadband, and television service: $84.95 a month. Not bad. The same cannot be said to the advertising agency that created this mess and the executives who approved it.

Richard Greenfield from BTIG Research, which covers Cablevision for Wall Street, isn’t impressed with Cablevision’s ads either:

We believe it is time for Cablevision to find a new ad agency, bring in some new marketing executives internally and seriously rethink what their consumer proposition is – going back to pitching the triple-play at an ever lower (now $84.95 price point) is not particularly compelling. Cablevision already has very high level of bundling of video, data and voice services across its customer base.  Given that, Cablevision should be devising a marketing approach to upsell existing customers, especially higher speed, higher ARPU broadband services (given their high margin).

Consumers concerned about the high cost of cable may not agree with Greenfield’s assessment. Paying $85 a month for a triple play package is a great deal, at least until it expires.

But we suspect a lot of consumers will never get that far through the ad, particularly when most viewers don’t pay that much attention to advertising in the first place.

Optimum profits.

Cablevision customers that managed to keep now-discontinued television packages will soon have to pay an extra $4-7 a month to upgrade to one of several newer packages this summer.

In March 2012, Cablevision dropped many of their “iO” packages in favor of new ones dubbed “Optimum.” The cable company originally let current customers keep the older, cheaper packages, but starting June 3 that will be no more.

Michael Chowaniec from Cablevision’s Government Affairs department notified Connecticut regulators the company was preparing to force customers into newer Optimum packages at a higher cost.

“Legacy customers migrating to comparable packages will experience a rate increase, but will gain between 6 to 23 linear networks and/or premium channels and enhancements and additional On Demand services,” Chowaniec wrote. “In many cases, the rate change is significantly less than the price of the additional channels and services, if purchased on an a la carte basis.”

“Customers on promotions for a legacy video package that is being eliminated will be able to keep their promotional rate through the end of the promotional period and will be migrated at the end of the promotion,” he added.

The rate increases come after an earlier $5 rate hike for broadband service and the introduction of a $2.95 monthly “sports programming fee” paid by most customers. That represents a total rate increase for some of up to $15 a month in 2013.

Life has been getting tougher for Cablevision customers over the past few months. Optimum Rewards members are losing their “Free Movie Tuesday” and discount ticket benefits with the sale of Cablevision’s 47 movie theater chain Clearview Cinemas.

Cablevision’s ruling family even canceled the July 4 fireworks display run for years from their home on Oyster Bay, N.Y. “for personal reasons.”