Susan Luzzaro 6:30 p.m., July 31
Tribune Co. Files for Bankruptcy, Saddled with $13 Billion in Debt and Decline in Ad Revenues
Chicago's Tribune Co., owner of the Chicago Tribune and Los Angeles Times, filed for Chapter 11 (reorganization) bankruptcy in Wilmington, Delaware today (Dec. 8). The company has $7.6 billion in assets and $13 billion in debt. The Chicago Cubs baseball team, part of Tribune Co., is not part of the filing. (This could possibly help the Padres's chances of trading star pitcher Jake Peavy to the Cubs.) The huge debt load largely came from a deal a year ago in which real estate mogul Sam Zell took the company private without plunking much of his own money into the pot. In theory, the company is greatly employee-owned. The Tribune has been in danger of missing lender-imposed financial targets at the end of this year. The targets are based on debt relative to cash flow. Zell said the company's newspapers and broadcast operations will continue operating as before. Zell told employees that, "A precipitous decline in revenue and a tough economy have coupled with the credit crisis, making it extremely difficult to support our debt." Among Tribune lenders are some of the financial industry's sickest financial concerns: Merrill Lynch, Barclay's, JP Morgan Chase, and Deutsche Bank. If Tribune dumps some newspaper assets in bankruptcy, the chances of Copley Press to unload the Union-Tribune could possibly worsen.