It Pays To Be A Chandler

THE CHANDLER FAMILY IS THE winner in Times Mirror's $2.3 billion sale of cable operations to Cox. Times Mirror, controlled by the 100-plus Chandler clan (stake: 31%), just settled a legal tiff with public shareholders, who griped the family got a sweeter deal. But income-wise, it will soon be clear who remains ahead.

The deal seems equitable--both sides do it tax-free. Non-Chandler investors in Times Mirror, whose properties include the Los Angeles Times, swap some of their Times Mirror stock for Cox cable stock. Cox, however, won't pay a dividend. And Times Mirror, to save for new ventures, slashed its quarterly payout by 78%, to 6 cents.

The family, headed by patriarch Otis Chandler, 67, isn't swapping for dividend-deficient Cox. That would incur an $81 million capital-gains levy: Terms of family trusts force them to sell non-TM stock. Instead, they get new, dividend-paying TM preferred.

Hence the lawsuit, which the company settled by letting nonfamily investors swap Times Mirror common for new TM convertible preferred, paying 6.5%. The Chandlers' preferred, though, is different. Analysts say its payout, yet to be announced, is likely to be about 9%. Times Mirror says outside investors are made equal by, among other things, the upside potential of Cox cable.

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