Tribune Co. Faces Default Threat
Reuters digs into Tribune Co.’s finances and decides that they’re pretty grim. Unless the current ad revenue trend turns around, Tribune could default on nearly $4 billion in debt and interest payments due at the end of 2009. That could force the company into receivership and asset sales. However, CEO Sam Zell is going to have to sell assets to cover debt payments, anyway. Reuters says Tribune’s previous management grossly underestimated the 2007/2008 revenue picture, which raises the question of whether Zell would have a legal case that he was sold a bill of goods.
Best quote in the story is from Zell, who recently joked to an audience that going from real estate to newspapers was like “going from leprosy to cancer.” He sure knows how to motivate the troops. Meanwhile a Lehman Brothers Analyst is reducing guidance on McClatchy’s earnings, saying it also faces a risk of default.
LA Observed has assembled some of the parting e-mails sent by laid-off staffers at the LA Times. Several take shots at TribCo owner Sam Zell. “You want people to ‘Talk to Sam’ but not to ‘Talkback to Sam,'” says one.
But Journal Register May Go First
Looks like the Journal Register could be the first big newspaper company to go bankrupt. Editor & Publisher quotes the New York Times as saying that the company may be unable to service its $625 million debt load on revenues that were $90 million last year and that could fall to $70 million this year. This creates the nightmare prospect of JPMorgan Chase and Deutsche Bank owning a newspaper company, which has never happened before in this traditionally predictable and stable business. It’s also hard to imagine who would buy the assets for something more than pennies on the dollar. Sam Zell, perhaps?
Some Newspapers Doing Just Fine, Thank You
The media buzz over the tailspin of major metro dailies obscures the fact that there are newspapers that are actually growing. New America Media notes that the ethic press is benefiting from the tide of immigration and actually creating jobs where the dailies are laying off. Daily newspapers in Korean, Chinese and Spanish are seeing healthy circulation growth, although they struggle with the same advertiser reticence as their English-language counterparts.
Dallas Publisher Urges Focus on Future
James Moroney, publisher and CEO of Dallas Morning News, told the 9th International Online Journalism Symposium what newspapers must do to survive. “If you are in the newspaper business, you are in the business of managing decline. If you are in the news and information business, then you have a healthy future,” he said. His organization has a strategy built all around hyper-local. No numbers cited.
TV Layoffs Hit Most Visible Journalists
Brittney Gilbert, who blogs for KPIX in San Francisco, writes about the layoffs of 14 people at the station, including two reporters who have five Emmys between them. She also notes that she, who looks to be about 27, was spared. This is the form that layoffs usually take, unfortunately. The most seasoned, highest paid staffers are the first to go. And who’s going to hire them?
Vermont Publisher Leaves for No Apparent Reason
The publisher of the Brattleboro Reformer is leaving after only two years. He says he likes Brattleboro and he isn’t leaving for any particular reason. No one seems to question why he would quit so early in his tenure. It’s all very Brattleboro.
This entry was posted on Tuesday, April 8th, 2008 at 8:13 am and is filed under BusinessModel, Layoffs, NewMedia, Newspapers. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.