Presented by: Luis Carrera Richard Gonzalez Jimmy Sanabria Miriam Lopez

1. Presented by: Luis Carrera Richard Gonzalez Jimmy Sanabria Miriam Lopez Regina Prieto Rosie B. Villanueva Tuesday, April 15, 2003

2. Chicago Tribune • TRIBUNE • One of country’s premier media companies • Businesses in publishing, broadcasting and on the Internet • Reaches more than 80 percent of U.S. households • Only media company with newspapers, television stations and Web sites in the nation’s top three markets • Tribune’s CEO and President is Dennis J. FitzSimons. • Tribune's Divisions in Three Industry Segments • Publishing • Broadcasting and Entertainment • Interactive

3. Mission Build businesses that inform and entertain our customers in the ways, places and at the times they want.

4. Tribune’s Divisions

5. Chicago Divisions Broadcasting and Entertainment Division • 26 Major-market television stations (WGN, CLTV, KTLA and Superstation WGN on national cable) • Ownership in multiple radio stations (WGN-AM) • Ownership of Chicago Cubs baseball team Publishing Division • Nation’s second-largest newspaper publisher in terms of revenue and No. 3 in total circulation • Operates 12 market-leading daily newspapers such as • Los Angeles Times • Chicago Tribune • Newsday • Plus targeted publications Spanish-language newspapers • La Opinion • Exito • Hoy • El Sentinel.

6. Divisions Cont’d • Tribune Interactive operates approximately 50 interactive news and information web sites • Sites rank among the top 20 in the news and information networks in the country. • Some of the sites are: CareerBuilder.com, Apartments.com, Cars.com BlackVoices.com.

7. Tribune – General Environment • Demographics • Younger audiences (18-34) and minorities offer unique challenges • Technological • Major player in the evolving markets • Leading Trend Setters • Economical • Cost Cutting • Reduced Advertising Expenses (all industries) • Regulatory • Digital Broadcasting • Relaxed cross-ownership rules and TV-ownership capitals • Merger & Acquisition Trend • Publishing highly fragmented • Increase circulation and achieve economies of scale

8. Main Competitors Gannett Tribune Co. Knight Ridder Dow Jones New York Times Newspapers 100 12 32 25 19 TV Stations 22 26 0 3 8 Web Sites 100+ 50+ 50+ 8 40 Other 8 11 0 3 5

9. Internal Analysis • President and CEO - Dennis FitzSimons (July 2001), promoted from within after 19 years of service • Research and Development - Demographic trends - Technology

10. Internal Analysis (continued) • Computer Information Systems • Efficient • Links all three divisions • Loyalty to Employees • Required senior management to take a 5% salary cut

11. Strengths and Weaknesses • Strengths - Innovator in digital media - Increasing market share - One of the largest media companies - Strong legal team • Weaknesses - Only operational domestically - Possess low performing radio and TV stations - Decreasing advertising sales

12. Opportunities and Threats • Opportunities - Growing minority population - Aging population - Lower internet costs - Changes in regulatory climate • Threats - Continued economic recession - Increasing globalization - Fierce competition within industry

13. Strategy Formulation(matching stage) SPACE Matrix -financial and industry strengths Vs environmental stability and competitive advantage -Competitive Quadrant: intensive, integration, joint venture Boston Matrix -goal: star status -ex: product development-successful products (maturity)

14. Strategy Formulation(matching stage) EI Matrix -hold and maintain -market penetration and product development -ex: market penetration-economies of scale- competitive advantage Grand Strategy Matrix -excessive resources -risk -ex: market development-good at what it does

15. Strategy Formulation(decision stage) • QSPM • Market development • Product development • Market penetration • Internal/External • Weights • Discarded-ex: increasing free cash flows

16. Four Strategies Considered • Joint venture with Univision • Serving the International Latin Market • Internet to Replace Paper Version • Medical Web Site with Walgreen’s

17. Four Strategies Considered 1. Joint venture with Univision • Parallel Interests, similar company • Acquisitions in Radio – Hispanic Broadcasting • Existing Core Competencies • Lower Initial Cash Outlay

18. Four Strategies Considered 2. Serving the International Latin Market • Minority and growing International market in Central and South America • Antitrust legislation not as great an issue • Global Perspective

19. Four Strategies Considered 3. Internet to Replace Paper Version • Younger Readership • Lower costs for production and distribution • Speedier and more timely Delivery • Greater Detailed Information • Core competencies

20. Four Strategies Considered 4. Medical Web Site with Walgreen’s • Existing working partnership with Walgreen’s (Walgreen’s Presents RxTV) • Small initial capital outlay • Core Competencies to design and operate web-sites

21. Our Choice of Alternative • Joint venture with Univisión • Leading Spanish-Language media company in USA • Univisión’s programming base • Strong Management Information System • Reputation of Univisión

22. Our Choice of Alternative • Sabado Gigante (Giant Saturday) • Univision has premiere Spanish-language website. • Hispanics are largest minority and most rapid growing • Galavision is the largest Hispanic cable network in the U.S. • Univision’s radio programming

23. Implementation • Both companies have strong R & D departments. • Change cultures and structure of organizations • Linking management information systems • Hiring more competent bilingual staff • No major acquisitions needed • Use major existing assets • Controlling committee will have equal say • Bringing legal aspects together

24. Questions and Answers