Tribune (Chicago Tribune, L.A. Times, et al.) Prepares for Bankruptcy Filing

[Newsjock]

Source: Wall Street Journal

Tribune Co. is preparing for a possible bankruptcy-protection filing as soon as this week, according to people familiar with the matter, opening a new front of trouble for the newspaper industry.

As Tribune continues discussions with its lenders to rework its debt load, the newspaper-and-television concern in recent days has hired Lazard Ltd. as its financial adviser and a legal counsel for a possible trip through bankruptcy court, according to people familiar with the matter.

A Tribune spokesman said the company doesn't comment on rumors or speculation. A Lazard spokesman didn't immediately respond to a request for comment. The appointments underscore the deepening distress for Tribune and other publishers.

Read more: http://online.wsj.com/article/SB122868944355686385.html?mod=testMod

[grasswire]

1. too bad the AFL-CIO can't buy the corp...

....and run some real workers' newspapers. That would be useful.

[ayeshahaqqiqa]

2. That's a great idea

I still fondly remember the radio station WCFL "the voice of Labor" in Chicago.

[grasswire]

9. think how our world would change if workers had a voice

A wise person told me about ten years ago that a strong national union-owned newspaper would transform this country. Instead of whiny MSM apologists for corporate America, the PEOPLE would have a voice.

Wow. The mind boggles.

[Tangerine LaBamba]

3. Honest to god, my mouth just dropped open when I read this

Just like this: :wow:

The Chicago Tribune going into bankruptcy? That's just incredible. Absolutely unbelievable.

Ah, Chimpy Fucknuts, you've given us such a wonderful world................. :sarcasm:

[madrchsod]

7. craigslist has killed their want ad revenue....

want ad revenue and employment listings pay the freight in the paper business.

[RUMMYisFROSTED]

4. aka...corpo papers on the decline...

:)

[DeepModem Mom]

12. Our ONLY major papers on decline. Until blogs have foreign correspondents, etc., we need...

these news-gathering organizations, IMO. Just look down the list of sources on this LBN page. Without NYT, WP, LAT, etc. -- and the wire services -- the page would be close to empty.

[madrchsod]

5. zell wanted to sell off the tribune company piece by piece

he`s going to lose his ass on the deal...even sammy boy can crap out.

he`s still trying to find a buyer for the cubs and the ball park...so far no one is meeting his price.

[bemildred]

6. Zell is a moron with a giant ego.

Par for the course these days.

[Neshanic]

10. Zell is my landlord. His minions commute from Hell to walk among us.

[bemildred]

11. In fairness to Zell, he is the last of a long line of caretakers.

Once the Chandlers decided, in their inimitable half-ass way, to bail out. But he would have done better to be obscure and effective. You can always tell these bozos that think public relations and accounting tricks is all you need to turn a failing business around.

[Robbien]

14. Not really

The Trib etal were making money, but not the kind of money the rich have become accustomed to receiving from hedge fund investments. The Trib etal were returning somewhere between 5-10%. Hedge funds were returning 20-30% (from all those ponzi schemes).

So traditional media started to get a bad rep about being a bad investment.

What happened when Zell took over was:

With this deal Zell even found a way to use the Tribune Company’s employee pension and stock ownership plans to finance the billions needed for the acquisition. By risking only $315 million of his own money he would still get controlling interest of a company valued at $8.2 billion.

But now it appears. . .that the company has hired bankruptcy advisors to map out the next steps. It looks as if Tribune can’t maintain certain covenants that were placed on it when the company borrowed nearly $12 billion to buy the business from the previous shareholders. Essentially that means the company isn’t earning enough money (before interest, depreciation and amortization) to justify the size of the loans it has.

http://www.thedailybeast.com/blogs-and-stories/2008-12-08/more-bad-news-for-tribune/

The media business wasn't failing before, it was just not super-performing. Now that in addition to running a media operation, it has to service the $12B of debt Zell piled on top of it. That is impossible.

[bemildred]

16. OK, let's not be fair to Zell.

Sounds almost down to the level of Maxxam and Hurwitz and what they did to Pacific Lumber Co.

[Bette Noir]

8. Tribune ruined the LA Times, which used to be a fine newspaper.

Good riddance to them.

I hope the workers at The LA Times can buy the paper and keep it running. I'd like to have a local paper again.

[sarcasmo]

13. They will sell the Cubs this winter.

[closeupready]

15. One of a handful of mainstream papers which endorsed GWB for President in 2004.

I just think the irony there is noteworthy.