News broke yesterday that the Tribune Company, owner of eight major dailies, 23 television stations, baseball team and Tribune Media Syndicate, filed for chapter 11 to protect it from creditors. The company owes $13 billion and has only $7.6 billion in assets. It hopes to sell it’s baseball franchise and Wrigley Field and other assets to generate cash to meet its debt obligations. The next principle payment is due next June at nearly $600 million. By filing chapter 11 now, it allows it to stay in business while it seeks better terms from its creditors.
Sam Zell, Tribune’s owner told employees through a memo that business goes on as usual.
Most importantly, I want to stress that we will continue to operate our business as usual. That includes meeting payroll and covering benefits (such as healthcare, disability and others), and paying vendors for all goods and services they provide to us going forward.
This filing should not impact the way you do your jobs on a day-to-day basis. We will continue to operate responsibly in a challenging environment â?? aggressively managing costs and maximizing revenue opportunities. These are all things we would do whether or not we were restructuring our debt.
In other grim media news, Newsday plans to eliminate 100 jobs and raise its newsstand price. Newsday is home to Walt Handelsman – a two time Pulitzer winner. No word on his job status. The Miami Herald is up for sale. Advertising Age estimates that in 2008, media companies (print, television, internet) have eliminated 30,000 jobs across the country or about 3.5% of its workforce.
A couple of Connecticut papers might be a bail out from their state government. Legislators are looking into offering low-interest loans or incentives to find buyers for Bristol Press and the New Britain Herald newspapers (along with 11 weeklies) which may close next month if a buyer is not found. The state does not want to become the owner of the papers but lawmakers see a need to preserve the jobs as well as protect the media from going under. Rep. Frank Nicastro understating the importance of media said, “Quite frankly and honestly, if it’s the newspaper today, what’s to say it won’t be the TV stations tomorrow?”
Somehow, I don’t believe we’ve hit bottom yet.
Rep. Frank Nicastro understating the importance of media said, â??Quite frankly and honestly, if itâ??s the newspaper today, whatâ??s to say it wonâ??t be the TV stations tomorrow?â?
Well, I suppose any economic analyst worth his salt could look at the two industries and compare the numbers. And that might be better than this kind of fear-mongering from elected officials.
Just as consumers have had to face fiscal responsibility for the past few years, now corporations are as well. The media corporations like these have been using credit to acheive their goals of establishing local media monopolies, after getting Congress to approve JOAs and crossover media ownership (TV, radio, newspapers). Their levels of debt are staggering. The abuse of credit has not only contributed to this financial crisis but also to the media crisis.
Low-interest loans for the Connecticut newspapers! The Journal Register, already in forebearance, is already unable to pay its debt, which is already ten times their revenues!
To me, the recession is actually growing pains. The next year will be all about companies, and even governments, that have been surviving on credit. Unless the government ends up running all the corporations that they continue to bail out, we’ll be weeding out irresponsible corporations and getting back to more localized and personally run businesses. That’s what we need to see, especially when it concerns the Media and Free Speech.
All of this is about personal responsibility, and the nature of a large corporation proves this to be an absent quality. We desperately need more personal responsiblity in this country on all levels.