CHICAGO (AdAge.com) -- The beleaguered newspaper sector sunk to new depths today as Tribune Co., publisher of the Chicago Tribune and Los Angeles Times, filed for bankruptcy protection.
Tough to manage debt
The company, which took on $13 billion in debt last year in a transaction to go private led by real-estate magnate Sam Zell, has been unable to successfully manage that burden as the worsening economic climate has exacerbated already difficult advertising and circulation trends for the chain.
"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," Mr. Zell, chairman-CEO, said in a statement. "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.
"We believe that this restructuring will bring the level of our debt in line with current economic realities, and will take pressure off our operations so we can continue to work toward our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and plays a vital role in the communities we serve. This restructuring focuses on our debt, not on our operations."
Earlier Newsday sale
The company said efforts to "monetize" the Chicago Cubs and the baseball team's home, Wrigley Field, will continue.
News reports earlier today said Tribune had been consulting the Wall Street firm Lazard and one of its longtime law firms, Sidley Austin, about a possible Chapter 11 filing.
Earlier this year, Tribune sold its controlling interest in another major property, the Long Island newspaper Newsday, for $650 million. The company has repaid about $1 billion in debt this year, it said.