Tribune Co to file bankruptcy?

[joeynach]

http://www.reuters.com/article/ousiv/idUSTRE4B62A620081207

 

Yikes the Tribune Co is said to be close to bankruptcy, this is not a good thing. I dont really care how it effects the cubs and what not, but to have such a large local firm in trouble like this is not good. People's jobs as well as the iconic Chicago media outlet are at stake. What would happen if there was no more 720AM, Ch 9, Chicago Tribune, etc.

[bmags]

that would suck. Just when the hawks were to get on Natty TV!!!

 

and I'm a journalism student.

[scenario]

It's not that big of a deal actually.

 

Chapter 11 Bankruptcy is a process that a lot of corporations use to help renegotiate debt.

 

The Trib has some extremely large debt payments coming due. That's the motivation I believe.

 

Typically firms in Chapter 11 continue normal operations.

 

You should only be really concerned if they owe you money.

 

Edited December 8, 2008 by scenario

[NorthSideSox72]

It's not that big of a deal actually.

 

Chapter 11 Bankruptcy is a process that a lot of corporations use to help renegotiate debt.

 

The Trib has some extremely large debt payments coming due. That's the motivation I believe.

 

Typically firms in Chapter 11 continue normal operations.

 

You should only be really concerned if they owe you money.

Or if you work there. If they file, jobs will be lost (in addtion to those already laid off).

 

Trib folks are angry. The company was headed for tough straights a while back anyway, but then Zell did a leveraged buyout and saddled the company with enormous debt. Probably not the smartest idea in the world, given the inevitable downturn in newspaper ad revenue that everyone knew was underway already. Anyway, TribCo would have to shrink even further to pay off the debt from Zell's purchase.

 

I've been with a company that had to go through that - owners needing to service a leveraged buyout. Its no fun at all.

 

[southsider2k5]

It's not that big of a deal actually.

 

Chapter 11 Bankruptcy is a process that a lot of corporations use to help renegotiate debt.

 

The Trib has some extremely large debt payments coming due. That's the motivation I believe.

 

Typically firms in Chapter 11 continue normal operations.

 

You should only be really concerned if they owe you money.

 

The one thing that could be interesting is that the sale of the Cubs would have to be negotiated and approved by a bankruptcy court if this was to happen. It makes their sale a potential nightmare for the buyers.

[CanOfCorn]

ACK!!!

 

MARIOTTI WAS RIGHT!!!!!

 

 

[Texsox]

The one thing that could be interesting is that the sale of the Cubs would have to be negotiated and approved by a bankruptcy court if this was to happen. It makes their sale a potential nightmare for the buyers.

 

Or not. Sometimes the sales go easier without someone so closely tied to the organization.

 

But I believe you are probably correct.

[NorthSideSox72]

Tickers reporting that TribCo is indeed filing for bankruptcy.

 

[southsider2k5]

Tickers reporting that TribCo is indeed filing for bankruptcy.

 

Stock went from 12.50 to 2.00 in a hearbeat. Its now pushing a dollar. Pretty soon it will cost you more for a Trib on the street, than a share of stock.

[southsider2k5]

The stock is now halted. Last trade at 1.07, low of 1.00.

[NorthSideSox72]

The stock is now halted. Last trade at 1.07, low of 1.00.

There are going to be a lot of pissed off Trib employees. This bankruptcy is directly caused by Zell's leveraged buyout debt.

 

Some employees filed suit against TribCo recently over it (supposedly the Board allowed it in violation of some rules) - we'll see what happens with that now.

 

[Texsox]

I'm considering a buy at that price. Off to do a little research.

[NorthSideSox72]

I'm considering a buy at that price. Off to do a little research.

I'd be very cautious. Its halted and at $1 because if it goes bankrupt, it goes to the bulletin boards, and if/when TribCo reorganizes, there is no guarantee the stock will be worth anything. They can elect to walk away from it.

 

[Texsox]

I'd be very cautious. Its halted and at $1 because if it goes bankrupt, it goes to the bulletin boards, and if/when TribCo reorganizes, there is no guarantee the stock will be worth anything. They can elect to walk away from it.

 

It will be interesting to know who the major shareholders are that are left. Follow the money as they say. My guess it was not primarily institutional sell offs that lowered the price.

 

And this becomes an investment along the lines of I'll take in the 6th a $10 tri-box 2-4-5-9

[southsider2k5]

I'm considering a buy at that price. Off to do a little research.

 

Send me the money instead. You have a much better chance of getting it back from me than you do this stock. The stock will be cancelled with a near certianty.

[Texsox]

Send me the money instead. You have a much better chance of getting it back from me than you do this stock. The stock will be canceled with a near certainty.

 

Yes I would, but with you, I could not write those loses off

[southsider2k5]

Yes I would, but with you, I could not write those loses off

 

Call me a charity if you like

[Texsox]

I wonder when newspaper publishers will be plying private jets to Washington to talk about a bailout

 

I was only paying half attention, I thought it was still in the rumors stage and yet to be officially announced.

[Balta1701]

For what it's worth, this has been a long time coming for the newspaper industry. They have been very, very slow to adapt to new media and it is costing them.

 

There will always be a demand for newspapers for a variety of reasons (People like them, they are useful, they supply useful ads/coupons, they give me something to read during coffee, they fund better investigative reporting than most any of the tv networks). But there needs to be significant reorganizing of the entire industry to reflect the fact that they all don't need the structure they currently have, and they need to adapt to making a profit in both the digital and hard copy forms. The hard copy form is going to decline for some time, and then probably level off. Any business that sees that sort of a decline in its chief product will probably need some version of bankruptcy.

 

Of course...the other option is we could just let themselves declare themselves banks, and then they'd get bailouts, no questions asked.

[Rex Kickass]

The Cubs are not included in the bankruptcy filing.

 

This seems like a preemptive strike - enabling them to sell with less pressure, I'd imagine.

I'm guessing we'll see WGN America spin off to someone else, the Cubs sale will help a ton and probably a few other papers as well.

[Balta1701]

The Cubs are not included in the bankruptcy filing.

 

This seems like a preemptive strike - enabling them to sell with less pressure, I'd imagine.

I'm guessing we'll see WGN America spin off to someone else, the Cubs sale will help a ton and probably a few other papers as well.

I would celebrate if the LA Times wound up being sold of to someone independent.

[FlaSoxxJim]

I wonder when newspaper publishers will be plying private jets to Washington to talk about a bailout

 

Shouldn't they have to fly paper airplanes?

 

 

[NorthSideSox72]

For what it's worth, this has been a long time coming for the newspaper industry. They have been very, very slow to adapt to new media and it is costing them.

 

There will always be a demand for newspapers for a variety of reasons (People like them, they are useful, they supply useful ads/coupons, they give me something to read during coffee, they fund better investigative reporting than most any of the tv networks). But there needs to be significant reorganizing of the entire industry to reflect the fact that they all don't need the structure they currently have, and they need to adapt to making a profit in both the digital and hard copy forms. The hard copy form is going to decline for some time, and then probably level off. Any business that sees that sort of a decline in its chief product will probably need some version of bankruptcy.

 

Of course...the other option is we could just let themselves declare themselves banks, and then they'd get bailouts, no questions asked.

Decline was underway already, as you state. But Zell's buyout accelerated the pressure dramatically, such that TribCo couldn't make the slide gracefully. Now they're bankrupt.

 

And yes Rex, definitely, this is a pre-emptive strike. They owed $70M by EOD today they couldn't make, and they know it will take a while to generate the cash from selling the Cubs.

 

But for all they are saying about this "not effecting operations", they are full of it. Layoffs will occur, paper quality will fall, ad space will increase, column inches will decrease.

 

[Balta1701]

Decline was underway already, as you state. But Zell's buyout accelerated the pressure dramatically, such that TribCo couldn't make the slide gracefully. Now they're bankrupt.

 

And yes Rex, definitely, this is a pre-emptive strike. They owed $70M by EOD today they couldn't make, and they know it will take a while to generate the cash from selling the Cubs.

 

But for all they are saying about this "not effecting operations", they are full of it. Layoffs will occur, paper quality will fall, ad space will increase, column inches will decrease.

Stealing from a blog commentary on their status;

The most depressing thing I've heard in a while was Wall Street Journal reporter Shira Ovide on Chicago public radio this morning describing Tribune Co.'s predicament. She pointed out that the Chicago Tribune itself actually has pretty good cash flow (relatively speaking) and some cash reserves. In other words, this is a company that should still be leading the industry - if it weren't for its massive, crippling debt.

 

That debt comes from two of the worst decisions in recent corporate history. The first was Tribune's purchase of Times Mirror in 2000 for the vastly inflated price of $8 billion, which made the company double down on old media without gaining any strategic benefit. The second bad decision piggy-backed on the first. Swooning from the fallout of the Times Mirror deal (including a very foreseeable $1 billion tax penalty), they paid another $8 billion to put a man who actively hates newspapers in charge of one of the nation's biggest newspaper operations. What could possibly go wrong?

[NorthSideSox72]

Stealing from a blog commentary on their status;

Yup.

 

And there is a third financial piece in there, related to the Times purchase. When they bought the times, they unwittingly bought themselves millions of dollars of back federal taxes (that we in dispute) along with it, which they had to pay.

 

Ouch.