Tribune could do better in the long run
TEXT OF STORY
Stacey Vanek-Smith: Meanwhile, the Tribune company is laying out a plan this week to emerge from bankruptcy. Tribune owns the L.A. Times and the Chicago Tribune, among others. Mitchell Hartman has more.
Mitchell Hartman: Chicago real estate mogul Sam Zell took the Tribune company private in an $8 billion leveraged buyout back in 2007; then couldn’t pay the bills. He unloaded New York Newsday, put the Cubs up for sale, and finally filed for Chapter 11.
John Morton: Just because Tribune company went into bankruptcy doesn’t mean its newspapers were losing money.
That’s newspaper analyst John Morton. He says in fact, the papers were pretty healthy. They just couldn’t generate enough profit to cover Zell’s debt payments once the economy got bad.
Several of the Tribune’s creditors have charged that the buyout was financially irresponsible to begin with. The company says its reorganization plan will settle some of those claims. And John Morton thinks Zell’s aggressive cost-cutting at the papers may actually help them survive in the long run.
Morton: Some of the changes that he brought to the newspapers — the layoffs, the cutting of the news staffs — were very damaging. But it will mean when they come out of bankruptcy that they will be lean operators.
And perhaps better able to compete in a cut-throat media environment.
I’m Mitchell Hartman for Marketplace.
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