The Tribune Company heading for possible bankruptcy: Reports
08 Dec 2008
The newspaper chain that owns the Chicago Tribune and The Los Angeles Times, The Tribune Company, is reported to be negotiating new terms with its creditors, and has hired advisers for a possible bankruptcy filing, according to reports.
The publishing and broadcasting heavyweight was reported to be preparing for a possible bankruptcy-protection filing that could happen as soon as this week, according to a report by The Wall Street Journal on its website on Sunday, which citied people familiar with the matter.
The Tribune is said to have hired Lazard Ltd as its financial adviser and Sidley Austin as legal counsel for a possible bankruptcy filing, the report said. Tribune is said to be in danger of going below the cash flow stipulated under its agreement with bondholders.
The Tribune went private in December 2007, in a $8 billion in a deal which put real estate billionaire Samuel Zell at its helm. The company has continued to struggle since that deal under the resulting debt, forcing deep cuts at its newspapers. It also sold its New York publication Newsday in a bid to raise some cash.
The Tribune Company owns 23 television stations and 12 newspapers. Two of the eight largest newspapers in the US (by circulation) as part of the Tribune, with end September data suggesting that the Los Angeles Times had weekday circulation of 739,000, while the Chicago Tribune had 542,000
Tribune has also been trying to offload its baseball team, the Chicago Cubs, along with the team's stadium, Wrigley Field, and its stake in a regional cable sports network. The deal is reported to be big enough to bring in over $1 billion for the company, but has been delayed for many factors, including the unfavourable credit market.
Like most newspapers in the US, the Tribune too has suffered double-digit percentage declines in advertising this year. Advertising, and readers are increasingly moving online to the Internet, and to compound that migration, the recession has prompted retailers and businesses across the US to reduce their ad spends. What makes Tribune's situation critical is the heavy load of debt it bears as a result of its last year's buyout.
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