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This includes my Orlando Slantinel as well which is a righty paper that favors the biz establishment and Republicans whenever possible...
:rofl:
Tribune files for Chapter 11 protection
Sentinel's owner to restructure its debt
Phil Rosenthal | Michael Oneal and Julie Johnsson, Chicago Tribune
December 9, 2008
CHICAGO - Media conglomerate Tribune Co., owner of the Chicago Tribune, Los Angeles Times, Orlando Sentinel and several other newspapers and media properties, filed for Chapter 11 bankruptcy protection Monday in Delaware so it can restructure its debt.
The Chicago Cubs and Wrigley Field, which Tribune Co. has on the auction block, are not part of the filing. The company said it has sufficient cash to continue to operate its media businesses, including publishing its newspapers and running its television stations and interactive properties, without interruption.
Chicago-based Tribune Co. had more than enough cash on hand to make a payment of $70 million due Monday. But the company was unable to persuade lenders to embrace a broader restructuring of its debt.
Tribune has repaid about $1 billion of its senior credit facility since real-estate magnate Sam Zell, now Tribune's chairman and chief executive, took the company private last December. But the situation at the company, which has suffered from industry-wide declines in advertising revenue that have eroded its cash flow since the deal was made, is emblematic of the squeeze felt throughout the media business overall, and newspaper companies in particular.
According to the filing, Tribune Co. has $7.6 billion in assets and $12.79 billion in liabilities. The company said it has moved to supplement its cash availability in case operating results take an even steeper decline through an agreement negotiated with Barclays to maintain its existing securitization facility.
Zell said in a conference call with reporters that he expects the company's operations will be largely unaffected by the bankruptcy filing. He would not comment on the possibility of further layoffs or what shape any further restructuring would take. But he said the filing would eliminate interest payments. Without them, he said, Tribune Co. produces a positive cash flow.
'Relieving the pressure'
"This filing is all about relieving the pressure on the company from too much debt," Zell said. "We believe we can operate normally."
He added that, "If we do our job well, the impact on advertisers will be nonexistent."
Zell made it clear that the impact on creditors, however, might be severe, noting that the company's debt is trading on the open market for cents on the dollar. Recovery by holders of the company's debt will likely be limited as well.
"Have you seen what Tribune debt is trading for?" he said. "We're talking about some very significant discount. Some elements will have no recovery."
Zell said he expects a deal for the Cubs to close soon and that the money would flow to the company and become a part of the bankruptcy estate. The company had previously earmarked the proceeds from any Cubs sale to be used to pay down the senior debt associated with last year's buyout. But now, the cash will be used at the discretion of the bankruptcy trustee.
"The money doesn't disappear," Zell said.
In a statement earlier in the day, he said the economic crisis had made it difficult to support the company's debt.
"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," said Zell. "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."
He added that the "restructuring focuses on our debt, not on our operations," and the company believes that a new debt structure "will bring the level of our debt in line with current economic realities, and will take pressure off our operations, so we can continue to work toward our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and plays a vital role in the communities we serve."
Slashing costs in 2008
This year Tribune Co. already has cut costs through moves such as reducing the staff and size of its newspapers. It also has unloaded assets, including selling control of its Long Island, N.Y., daily newspaper Newsday to Cablevision's Dolan family and part of its stake in the CareerBuilder.com employment site to fellow partner Gannett Co.
Tribune Co. expects its first-day motions will be approved in the next few days.
The company's largest creditors include some of the largest financial institutions in the world who provided the financing that enabled the company to go private in late 2007, Hollywood studios and entities that are controlled by Zell's Equity Group Investments, the bankruptcy filing shows.
Who's on the list
JP Morgan Chase Bank N.A., one of the lead bankers in the complex transaction, is owed $1.48 billion for two loans it provided to Tribune. Deutsche Bank National Trust, holds nine claims totaling $2.9 billion, according to the filing. Other major creditors include KKR Financial Corp., Goldman Sachs Group, Merrill Lynch Capital Corp., Citicorp North America and Bank of America.
Also among the Tribune's creditors are Warner Bros Television, which is owed $23.7 million; Walt Disney Co.'s Buena Vista Entertainment Inc., which is owed $6.2 million; Sony Pictures Television, which is owed $2.2 million; and Paramount Pictures Corp., which is owed $1.7 million.
Several former executives are also listed as creditors in the filing for retirement and deferred compensation due them. Mark Willes, who was chairman and chief executive of Times Mirror when the Los Angeles-based media company was acquired by Tribune Co. in 2000, is owed $11.2 million; Robert Erburu, who was Willes' predecessor atop Times Mirror, is owed $4.3 million.
Also listed as creditors in the filing are a series of entities controlled by Equity Group, which are owed at least $16 million.
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