Tribune Group files for bankruptcy
Tribune Co., which owns the Los Angeles Times, KTLA Channel 5 and the Chicago Tribune filed for bankruptcy protection on Monday.
The Chicago based company was taken private by real-estate developer Sam Zell last December in a 8.2-billion-dollar deal. The leveraged buyout largely resulted in the company’s current debt load of about 12 billion dollars.
Tribune is the first major newspaper to proclaim bankruptcy in modern history. The media giant said its businesses will continue to operate throughout the restructuring of its debt obligations.
The company said it has sufficient money to maintain its operations and listed $7.6 billion in assets under the bankruptcy filing but that it owes $1 billion in interest payments this year and another $500 million by June.
“Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers,” chief executive Zell said in a statement today. “Unfortunately, at the same time, factors beyond our control have created a perfect storm — a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt.”
The filing does not include Tribune’s Chicago Cubs Major League Baseball team, or their storied ballpark, Wrigley Field. Tribune has been trying to sell both.
For several years, newspapers have seen sudden declines in print-advertising profits, as traditionally heavy buyers of print ads such as automakers and airlines have experienced problems of their own.
The New York Times, possibly the most prominent newspaper in the world, has lost 60% of its share value and is experiencing cash flow difficulties. It has shut down its sports magazine and is planning to mortgage its new headquarters in Manhattan to make $225 million.
Photo: The Guardian