Alan Mutter, a media consultant and former newspaper editor, said the move "indicates Tribune could not find buyers to pay the price it was hoping to get for its publishing assets."
Tribune's newspapers have been hurt by an industrywide shift that has driven more advertisers to the Internet. The downturn in print advertising was one of the factors that caused Tribune to file for Chapter 11 bankruptcy protection in 2008.
The remaining company, which would keep the Tribune Co. name, would include Tribune's local television stations; WGN radio and cable networks; its television production, digital and media services ventures; and its interests in Classified Ventures, CareerBuilder, the Food Network and real estate.
By holding onto the growing digital classifieds business and the real estate, Tribune Co. is decreasing the value of its newspaper group by at least a third, according to Ken Doctor, a newspaper industry analyst with Outsell Inc. Doctor previously valued Tribune's newspaper business between $450 million and $700 million.
Doctor said he expects Tribune will still try to sell the newspapers individually or as a group, but the spinoff will help clarify its focus on TV assets.
"They want to make sure these assets don't muddy the broadcast play and they set the clock to do that," Doctor said.
Tribune said its board will develop a detailed plan for the split over the next nine to 12 months. After the split is complete, the companies will have separate boards and management.