The Tribune Company, the largest-owned media company in America, filed for bankruptcy today in a move that underscores the struggles of the media industry at a time when the country is in a recession and advertising revenue is at record lows.
Tribune had accumulated nearly $13 billion in debt, largely accrued when real estate mogal Sam Zell bought the company last year. The filing is an effort to restructure it sizable debt interest payments.
“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, chairman and CEO of Tribune. “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 company owns two of the eight largest newspapers in the country by circulation: The Los Angeles Times and the Chicago Tribune. It also owns 23 TV stations and 10 other newspapers. Tribune Co. also owns the Chicago Cubs baseball team, which it has been trying to sell since last season but for several reasons, a sale didn't take place.
Dallas Mavericks owner Mark Cuban is believed to be the highest bidder for the Cubs, but his recent federal allegations of insider trading may hinder that deal.
Read the official press release of the Tribune Co.'s Chapter 11 filing here.
Read Sam Zell's letter to Tribune employees here.
Read a Chicago Tribune blog posting about the filing here.
Read about the filing here.
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