Tribune: Bankrupt
December 9th, 2008What will Southern Californians line their bird cages with if the Los Angeles Times goes down???
Via: Los Angeles Times:
In perhaps the starkest sign yet of trouble in the news business, media giant Tribune Co. — owner of the Los Angeles Times, KTLA-TV Channel 5 and other newspapers and TV stations — filed Monday for bankruptcy protection from creditors.
Tribune’s woes stem from a combination of plunging advertising revenue and a heavy debt load of $12.9 billion, much of it incurred a year ago when it was taken private by Chicago real estate entrepreneur Sam Zell.
Tribune is far from being the only troubled media company. In the last week alone, the New York Times said it would mortgage its Manhattan headquarters for as much as $225 million to help cover operating costs, industry leader Gannett Co. pushed ahead with the layoff of 2,000 employees, and Denver’s Rocky Mountain News and the Miami Herald were put up for sale.
“Everywhere you go, it’s the same story,” said Alan Mutter, a veteran newspaper editor and investor who writes the Newsosaur blog. “It’s all kind of appalling.”
But Tribune has become the first major news organization to file for bankruptcy, which could add a new dimension of uncertainty for the company and its 16,000 employees. During a Chapter 11 bankruptcy reorganization, major management decisions must pass muster with a bankruptcy judge, and the ultimate fate of a company — including whether it remains intact or is sold off in pieces — could be decided in part by its creditors.
Zell said Monday that Tribune’s business units would operate as normal and that the focus of the reorganization would be “on our debt, not on our operations.”
In its filing in Bankruptcy Court in Delaware, the company, which owns eight metropolitan daily newspapers and 23 television stations, said it had $7.6 billion in assets and debt of $12.9 billion.
