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Zell's Tribune Co. Heads Toward Default on Loans
Newspapers reeling from low ad revenue
By John Johnson
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Posted Jun 19, 08 5:43 PM CDT
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(Newser)
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As the newspaper industry continues its accelerating skid into the red, even billionaire Sam Zell's Tribune Company is on track to default on its massive loans as soon as the end of the year, an analyst predicts. The parent of the Chicago Tribune and Los Angeles Times is far from alone. Bloomberg takes a look at the industry as it struggles to overcome historic lows in advertising revenue.
Like other highly leveraged newspaper companies, Tribune Co. is trying to cut costs and sell assets—Zell is unloading Newsday for $632 million—but it might not be enough to meet the terms of its loans. "It's inevitable that one or more of the many highly leveraged companies in this industry will get into trouble,'' said one analyst. "Whether that translates into bankruptcy, only time will tell."