U.S. Bankruptcy Judge Kevin Carey now targets an early July ruling on Tribune Co.'s latest plan to exit bankruptcy protection.

Carey, who rejected Tribune's previous plan last year, heard the last round of objections in Delaware court in mid-June. Several creditor factions are dissatisfied with a settlement of many claims related to Sam Zell's leveraged buyout, which Carey has already cleared. The outstanding issues are relatively technical, concerning matters such as the classification of some modestly sized claims and whether to set reserves for others. Though Tribune faced a rival plan last year from noteholders, there are no other proposals under consideration.

Tribune still needs the approval of the Federal Communications Commission, which pulled its review last year because of the uncertainty over the Chicago publisher and broadcaster's reorganization.

Still, as unlikely as it has at times seemed over the past 3-1/2 years, Tribune's bankruptcy may actually come to an end. The next question: What will the new owners do with it?

Secured creditors Oaktree Capital Management LP; Angelo, Gordon & Co.; and J.P. Morgan Chase & Co. would be the largest shareholders and appoint the board, starting a new era for a company that has existed for 165 years. The prospective owners will have significant decisions to make. Tribune is really two companies -- a newspaper publisher and a television broadcaster -- with some valuable new-media properties tossed in. Publishing and broadcast are at a crossroads. The latter is rebounding after the recession, and the former bears an uncomfortable resemblance to fading print media such as directories, with less hope that things will look up anytime soon, if ever.

What will Tribune do in, say, Los Angeles, a glamorous market with a tectonically unstable newspaper market?

Tribune has exhibited a willingness to shed assets, with sales of Newsday and the Chicago Cubs baseball team. Some of its trophy assets could attract buyers. Billionaire businessman Eli Broad is still interested in the Los Angeles Times. Others would like to come forward for such a prize, although Tribune's papers in Hartford, Conn., or Allentown, Pa., might not stir vanity buyers. There is also anticipation of a robust M&A market in the TV industry. The reorganized Tribune has stations in premier markets that together are worth billions and would have allure.

There are a few catches. Any sales would carry a hefty tax bill because of the tax maneuvering involved in Zell's buyout. The most radical breakup scenarios, such as a tax-free spinoff, would be limited because of restrictions on companies emerging from bankruptcy with new ownership. While the company has been in Chapter 11 limbo, some opportunities, such as purchasing the publisher of the Orange County Register, have passed it by.

Tribune's new owners will have options, however.

Tribune dates to 1847, when the Chicago Tribune was founded. The company launched Chicago TV station WGN and New York's WPIX in 1948. Today it owns close to two dozen TV stations and a portfolio of newspapers that, in addition to its flagship Chicago daily, includes the Los Angeles Times, The Baltimore Sun, the Orlando Sentinel and the Hartford Courant. It also owns Chicago radio station WGN.

Modern-day Tribune was shaped by the 2000 merger with the Los Angeles-based owner of the Los Angeles Times, Times Mirror Co., and the thesis that pairing dailies with TV stations in big cities would yield vast operational and financial benefits.

The companies announced the deal on March 13, 2000, just two months after the merger of Time Warner Inc. and America Online Inc. As AOL Time Warner whiffed at producing the next Netflix Inc. or YouTube Inc., the merged Tribune and Times Mirror failed to revolutionize the models for print and television. "Largely what we've seen is that the synergies did not materialize," says Ken Doctor, a consultant with Burlingame, Calif., publishing analytics firm Outsell Inc.

Tribune picked up a few points in market share in advertising by cross-platform selling, Doctor suggests. There were also benefits from combining IT platforms and other integration steps. And there are "late-breaking" developments that link assets, he adds. Chicago now handles world reports for the papers, though not the Los Angeles Times. Tribune, like Gannett Co. and Journal Register Co., sees local news as the franchise of its various papers. Tribune has also created breaking-news desks that work across television, print and online, and introduced new programming such as a TV show featuring right-wing radio personality Bill Cunningham.

The sale to Zell was born out of a comprehensive review of how to structure this vast portfolio of media companies, and whether all the assets belonged together at all.

Representatives of trusts held by the Chandler family, which had ruled Times Mirror and supported the 2000 merger, were particularly unhappy with the new Tribune. The family outlined its dissatisfaction in a 2006 letter to the board. "As you know, the basic strategic premise of the Tribune/Times Mirror merger was that the cross-ownership of multiple premium major media properties in the nation's three largest media outlets would provide a platform to produce above-industry performance for both its newspaper and broadcast assets and for strong growth in interactive and other media opportunities," the trusts wrote.

"This strategy has failed," they concluded. Moreover, the Federal Communications Commission did not, as Tribune anticipated, loosen restrictions on joint ownership of newspapers and TV stations in big cities. The company needed waivers for some of its licenses.

The Chandler family argued that Tribune should separate newspapers and broadcast, divest assets through tax-free spinoffs and find a private equity firm to sponsor its TV stations. Ultimately, the sale to Zell provided a financial solution that paid off the Chandlers and other investors. It included a nifty tax scheme but did not address the broader issues.

Tribune's soon-to-be owners have some experience in media. Oaktree is among a group of bondholders that took equity in the bankruptcy of Charter Communications Inc., formerly controlled by Microsoft Corp. co-founder Paul Allen. The St. Louis cable operator, which exited bankruptcy protection in late 2009, has made acquisitions and dispositions but no major deals.

Angelo Gordon held a stake in the publisher of the Philadelphia Inquirer and Daily News through the bankruptcy courts in 2010. The group sold the papers to local investors for $55 million this year. Among other newspaper investments, the hedge fund put money in Star Tribune Holdings Corp., which owns the Minneapolis-based Star Tribune.

J.P. Morgan Chase recently held more than 5% of Gannett but reduced its stake. Through reorganizations, it has also obtained positions in Yardley, Pa., publisher Journal Register and in Freedom Communications Inc., the publisher of LA Times neighbor The Orange County Register, which is selling off its assets.

Oaktree will have the biggest position and appoint two of Tribune's seven directors, one with a three-year term and one a two-year term. Angelo Gordon and J.P. Morgan Chase will each appoint one member with a three-year term.

Oaktree, Angelo Gordon and J.P. Morgan will jointly appoint two more directors, who will serve one-year terms. Tribune's CEO may have a seat, depending on his or her employment agreement.

The media marketplace has changed significantly since Tribune entered bankruptcy protection. The debtor's units reflect the rising and falling fortunes of TV and newspapers, respectively. In preparation for the hearing on its plan, the company recently updated an early 2011 valuation of its businesses In just a year, Tribune's TV business gained in value by $350 million and its newspapers lost $300 million of their collective worth.

The disparity is growing. New York private equity firm Veronis Suhler Stevenson projects that television broadcasters will grow 9.3% in 2011 and 2012, which is the third-best rate among the media categories that it examines. Newspapers were the second-worst performing category in the survey, beating only directory publishers. For the sector, the recession hasn't conclusively ended. Another downturn would be brutal. "The 5 to 10% decline in print advertising this year is sending a chill through everyone," Outsell consultant Doctor says, "because they had told themselves we will finally stabilize when we see improvement in the economy."

Against this backdrop, it's reasonable to ask whether the businesses should be kept together or whether Tribune should exit, consolidate or otherwise restructure some of its properties. While Tribune emphasized the combination of TV and newspapers with the 2000 Times Mirror deal and then doubled down with Zell's debt-laden 2007 LBO, there are other approaches.

Belo Corp. broke apart its publishing and broadcasting businesses in 2008. The Dallas company spun out newspapers including The Dallas Morning News into a debt-free entity that took the name A.H. Belo Corp. Belo kept 20 TV stations and its cable networks, which held $1.2 billion in debt.

Freedom Communications emerged from Chapter 11 protection in April 2010 under the control of creditors including Angelo Gordon. The sale of its TV stations to Sinclair Broadcast Group Inc. left the newspaper division debt free. The company is now selling off the papers.

Gannett has held on to its stations, which have grown but have not offset declines in its extensive print empire. Standard & Poor's said in a report that the company's 8.4% decline in newspaper advertising revenue and higher investment spending for the year ended March 2012 outweighed gains of 6.8% in digital revenue and 7.5% in broadcasting.

E.W. Scripps Co. split along different lines in 2008. Scripps kept newspapers and TV together. It spun out "lifestyle" cable channels and content, such as the Food Network, which it co-owns with Tribune, and the Travel Channel, into Scripps Networks Interactive Inc.

Doug Arthur, an analyst covering media companies for Evercore Partners Inc., says there is not "an easy formula" for evaluating the breakups of newspaper and television companies. "The theory behind the splits makes perfect sense on paper," he says. "At the same time, have they really created a lot of value?"

A standalone TV company would support a higher multiple than a newspaper company, or a hybrid newspaper-TV company. "The issue is, if you take TV away from the newspapers, it really exposes that part of the story," he says. "You diversify against a business that is getting pressured both cyclically and secularly."

A.H. Belo, with its newspapers, has posted losses since its spinoff. The stock fell 6% on April 30 when it reported first-quarter results that included a 12% decline in advertising revenue. Adjusted for dividends, the newspaper company was worth $12.36 per share at the time of the 2008 split and has recently traded around $3.86.

Belo, which owns the TV stations, suffered a slightly less severe drop from $11.16 to $5.84 per share, also adjusted for dividends.

Gannett's shares fell from $27.53 in February 2008 to $12.79.

Adjusted for the spinoff of its cable networks and dividends, E.W. Scripps went from $9.44 to $8.73.

On the other hand, Scripps Networks Interactive started trading at about $41 in June 2008, months after the Belo split, and is now around $56.81. While A.H. Belo's first-quarter results were worse than expected, SNI's numbers beat expectations handily, and its stock bounced 7.5% on the day of the early-May announcement.

Given the stock performance, some of the corporate makeovers may suggest futility. However, their reduced share prices are better than recoveries for Tribune's wiped-out equity holders.

A tax-free split would not be an immediate option for Tribune, according to tax analyst Robert Willens of Robert Willens LLC, who says the company would have to wait two to five years following its exit to avoid a tax bill.

The company could be involved in other types of transactions, though. Los Angeles provides an interesting challenge. From the very start, Tribune's acquisition of Times Mirror may have irked locals who viewed it as a Midwestern invasion. The Los Angeles area is a rare newspaper marketplace. In an era when two-daily towns are unusual, LA has three newspaper publishers that were bankrupt at the same time: Tribune, Orange County Register publisher Freedom Communications and MediaNews Group Inc., which owns the Los Angeles Daily News and several other papers in the area.

At Tribune's previous confirmation hearing, in March 2011, CEO Eddy Hartenstein told Carey that the company needed to get out of bankruptcy quickly because of the fast pace of change in the media business. Tribune could not explore partnerships or transactions while in court. Hartenstein also told a Bloomberg News reporter that Tribune had considered purchasing the Orange County Register.

Massachusetts entrepreneur Aaron Kushner beat out Hartenstein, announcing an acquisition of Freedom in June.

Outsell consultant Doctor says the market isn't supporting the combined cost structures of the three companies. Of the three, he predicts, only two will remain in Los Angeles.

There would be more options for Tribune's TV stations. Leverage profiles are improving as Ebitda increases and companies pay down their debt. Political advertising, fueled by Super PAC spending, following the Supreme Court's Citizens United ruling, will only help their balance sheets. Finance markets have been more welcoming.

Some TV groups may look to increase their bargaining position in talks with cable operators and with the broadcast networks over fees for their transmissions and programming.

Not surprisingly, there have been a number of deals in the past year, many of them in the middle-market category. Sinclair paid $385 million for Freedom Communications' eight TV stations, and $200 million for seven stations owned by Cerberus Capital Management LP's Four Points Media. And E.W. Scripps bought McGraw-Hill Cos.' nine-station group for $212 million last year. LIN TV Corp. said in May that it would buy New Vision Television LLC's station portfolio for $342 million. "There is still an appetite, but at lower multiples," says Justin Nielson of media research firm SNL Kagan.

The analyst says the Freedom sale came to 8.7 times cash flow for 2011 and 2012, compared with valuations in the midteens for 2007 deals such as the LBO of Univision Communications Inc. by a Haim Saban-led investor group and Clear Channel Communications Inc.'s sale of TV stations to Providence Equity Partners Inc.-backed Newport Television LLC. "There is an increased appetite for some risk in financing these deals," Nielson adds.

There is no comparison, however, between Tribune's portfolio and the stations that have changed hands recently.

Tribune owns stations in New York, Los Angeles and Chicago, not to mention Philadelphia, Dallas, Washington, Houston, Seattle and Miami.

Typically, such properties in the largest markets are owned and operated by the networks. They don't often come up for sale.

"I would think there would be a lot of interest," says Edward Atorino of Benchmark Co. LLC, particularly in WPIX in New York, KTLA in Los Angeles and WGN in Chicago. "Those three stations would be crown jewels for anybody."

In a sale, Tribune's TV portfolio would be a costly package, however. The broadcasting arm, which includes 23 stations that generated $1.1 billion in 2011 sales, produced about $380 million in operating cash flow. Tribune valued the business at $2.85 billion in its latest plan, based on the assumption of a June 30 exit from court.

The newspaper publishing division generated more than $2 billion in 2011 revenue, or nearly two-thirds of the company's total sales. Tribune valued the papers, which produced $220 million in operating cash flow, at $623 million.

Holdings in companies such as the Food Network LLC culinary venture with Scripps Network Interactive, job-listing website CareerBuilder LLC, which is co-owned with Gannett and McClatchy Co., and other businesses are worth some $2.26 billion.

In a recent report, Wells Fargo Securities LLC analyst Marci Ryvicker said Sinclair has the most flexibility to make acquisitions among the broadcasters she follows. In a review of buyout capacity, she assumed that companies would want to keep their leverage close to 4.5 to 5 times Ebitda and would want to devote capital to shareholder returns.

Sinclair has $1.18 billion in available resources, using her methodology. The sum includes $1.03 billion in debt capacity plus $150 million in cash that it has already generated or that its businesses are forecast to generate.

Dallas TV group Belo is next with $789 million in acquisition capacity, including $623 million in debt and $165 million in cash.

Were Tribune to sell some of its stations, or other assets, it could expect a hefty tax bill. When Zell took Tribune private, he converted the company from a C corporation to an S corporation, a tax-light structure in which income or losses are passed through to shareholders. "There would be this unusual confluence of events where the company had experienced tremendous losses, but those losses are not the property of the company, they are property of the shareholders," says tax analyst Willens.

The tax treatment is meant to encourage employee ownership, and is typically used by smaller companies. An S corp., therefore, must have fewer than 100 shareholders.

Zell took Tribune private through an employee shareholder ownership plan. An ESOP can be treated as a single shareholder, for the purposes of an S corp. A hedge fund cannot. Moreover, a company exiting bankruptcy protection can often preserve net operating losses that it could apply against future taxes.

Tribune wouldn't have the losses, Willens notes, because it was previously an S corp. The company also will not have any tax basis on its assets, meaning that it would have nothing to shield profits from sales or from its operations. The tax-efficient status of deferred gains from the Newsday and Cubs sales could also be imperiled.

"It would have been one of the greatest tax dodges in history," Willens says of the LBO-era Tribune. "Now, because of the bankruptcy," he says, "it is going to be one of the worst tax scenarios you could imagine."

Even with an approval from Carey, Tribune would still need clearance from the FCC. The agency said in October that it would put down its review until there was more certainty about the Chapter 11 case.

Bingham McCutchen LLP lawyer Andrew Lipman suggests that if Tribune does not have to make a major amendment to its application and the FCC does not need to give additional public notice, the agency could grant Tribune's application 30 to 60 days after confirmation. It could happen sooner if the media bureau has drafted a preliminary order. There could be delays if the commission has questions about the structure of the reorganized company and its ownership. "These types of reviews by the FCC are extremely fact specific," he adds, suggesting that the FCC would likely approve Tribune's application.

Cross-ownership of TV stations and newspapers in the same city has been a sensitive area. In 2007, then-Illinois Sen. Barack Obama opposed a plan by then-FCC Chairman Kevin Martin to loosen rules on cross-ownership. Obama and Massachusetts Sen. John Kerry warned that they would push the Appropriations Committee to block the funds to implement diminished restrictions.

Tribune's ownership of KTLA and the Los Angeles Times drew vocal criticism in 2006 and 2007, when the FCC reviewed media ownership rules and also considered the Zell LBO.

Mark Fratrik of BIA/Kelsey suggests that, given the changes in media, the union of a newspaper and TV station should not be prohibited in many markets. "Competition is much greater than it was several years ago," he says. "Online advertising is stronger, out-of-home advertising is stronger, local cable advertising is stronger, and you've still got radio and other local media outlets."

However off track Tribune may have gotten with the Times Mirror merger or the Zell LBO, it is clear that video, print and other media are converging. Text and video pervasively commingle on websites, tablets and phones.

Newspapers and television stations just haven't clicked. "There is no doubt that on a local and regional basis the local media companies of 2015 and 2020 will be multimedia platform companies," Doctor says. "The question is what kinds of companies bring them together."

Will it be a Huffington Post-type local Web startup? A broadcaster that absorbs print or a print organization that absorbs broadcast?

Tribune's exit from Chapter 11 will be a milestone, marking the end of over three years of wrangling between creditors. The tough questions won't end, however, as Tribune's new owners look for ways to cash out of their once-golden assets.