If the newspaper industry of late could be compared to a game of dominoes it looks like the next, very big one, may be about to go. The New York Times is reporting that the Sam Zell-owned Tribune Co. is deeply in debt (this we already knew) and is considering filing for bankruptcy.
Which makes us wonder if maybe all that shrinking and those “deep cuts” and the talk about reporters giving the customer what they want instead of gunning for Pulitzers didn’t actually pay off in the end. Of course, back in the spring of 2007 when Zell bought the company part of the plan was to sell off the Tribune-owned Chicago Cubs and reinvest that chunk of money, something, the Times points out, that the credit crunch (and travails of top-bidder Mark Cuban) have made exceedingly difficult. Also, this may all just be a bargaining tactic.
Tribune is in danger of falling below the cash flow required under its agreement with its bondholders, but it is not clear how seriously Tribune is thinking about seeking bankruptcy protection. Analysts and bankruptcy experts say that the hiring of advisers, including Lazard and Sidley Austin, one of the companyâ€™s longtime law firms, could be a just-in-case move, or a bargaining tactic. The company would not comment on Sunday.
The weak state of newspapers has made some lenders more loath than usual to force bankruptcy, fearing that it could worsen their chance of significant recovery, or at least delay it.