Tribune Co. disclosed Friday afternoon that its earlier agreement to sell two Connecticut newspapers to Gannett Co. for $73 million has been called off in the wake of an unfavorable arbritrator's ruling regarding Gannett's plan not to honor an existing union contract at one of the papers.
Tribune announced in March that it had agreed to sell the Advocate in Stamford and the Greenwich Time to Gannett, which is based in McLean, Va.
Nearly 40 of the editorial employees at the Advocate are represented by the United Automobile, Aerospace and Agricultural Implement Workers of America union; when Gannett said it did not plan to honor the contract with the unionized reporters and photographers, the workers got a federal judge to temporarily block the sale of the operations, pending an arbitrator's ruling.
Last month, the arbitrator ruled that Tribune couldn't sell the company unless the buyer agreed to assume the existing union contract as a condition of the sale. Gannett declined to do so, however, and on Friday the two companies announced the deal had been terminated.
Tribune, which is in the process of going private through a heavily leveraged $8.2 billion transaction, said it will "immediately" begin soliciting new offers for the two newspapers.
Tribune owns the Chicago Tribune, Los Angeles Times, WGN-Ch. 9 and other media properties.
