Tribune facing an 11th-hour grilling (Dinosaur Media DeathWatch™)

Chicago Tribune ^ | December 19, 2007 | Michael Oneal

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Tribune Co. executives were sweating out aggressive last-minute questioning Tuesday from bankers reluctant to fund the final portion of a debt-laden $8.2 billion deal to take the company private with Chicago billionaire Sam Zell, sources close to the company said.

The Chicago-based media giant was still hoping to finalize its transaction by Thursday, but sources said the banks, worried about losing money on the deal in skittish credit markets, were scouring company records before committing to fund the transaction.

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It was unclear what information the bankers were seeking. But the dilemma they face is that with the credit markets in turmoil and Tribune Co.'s revenue in decline, they likely will be unable to sell the remaining $4.2 billion in loans and bonds to investors.

Even six months ago, Tribune and its banks had to entice debt investors with higher interest rates than anticipated to get the first part of the deal done.

Since that time Tribune's revenue picture has deteriorated. The company, which owns the Chicago Tribune, Los Angeles Times and WGN-Ch. 9 among its many media properties, has suffered from competition brought on by the Internet and other digital media. But it is also heavily exposed in markets such as Florida and California, states that have been hardest hit by the housing crisis.

Now, the Tribune loan is trading on the open market at a steeper discount, meaning that if the banks were to seek buyers for the remaining portion, the terms would be unworkable. Consequently, the banks will have to hold undesirable credit on their balance sheets.

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ping

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Bad JuJu here at the last moment.

[MrEdd]

Could the bankers be realizing that if Zell manages to raid the pension funds the Feds could require the banks to come up with the absconded money after the tribune’s inevitable collapse?

[bert]

Bankers like to get blood from a turnip...squeeze, squeeze squeeze.

[Eric in the Ozarks]

Nice move, Sam. Don’t use your own money...

[NativeNewYorker]

with the credit markets in turmoil and Tribune Co.'s revenue in decline, they likely will be unable to sell the remaining $4.2 billion in loans and bonds to investors.

How utterly delicious. The sanctimonious frauds ran their businesses into the ground so thoroughly the bankers fear they can't round up enough idiots to take the loans.

Remind me again why anyone ever gave a damn what they wrote....

[mallardx]

What a joy it is watching these DNC frauds lose their corrupt businesses, running them into the ground.

[TenthAmendmentChampion]

Their constant socialist, anti-business drivel comes back to haunt them now, when they are guaranteed to continue to face declining profits for years to come. Haven’t they told us for years that profits are bad and “the rich” don’t pay their fair share? The old adage applies: be careful whom you step on when you’re on the way up, ’cause you’ll meet them on the way down.

[Grampa Dave]

Maybe these bonds are so bad, even the state retirement funds of California and NY won’t buy them.

Ron Burkle will probably look ways to package these bonds so innocent investors will never know what they are buying.

[rod1]

The bankers think they will get answers looking at company records do they?

Maybe a miunute or two on the internet would better tell them not whether, but rather, just how much money they are going to lose.

[ken5050]

Told you so a few days ago..

[abb]

Told you so a few days ago..

Indeed you did. Excellent call.

[Brad from Tennessee]

Sam Zell and his partners could find far wiser investments to put their billions in than this rusting Studebaker of a corporation. When the bottom falls out they, and their creditors, will find it difficult to liquidate obsolescence.

[Milhous]

TRB tempts me with a target of opportunity that takes the form of an apparently lucrative short should Zell's deal collapse. You got any words of wisdom to keep me from going off a cliff?

Tribune CEO heads for the door

By Paul Bond

Dec 20, 2007

Tribune Co. confirmed Wednesday that chairman and CEO Dennis FitzSimons, a 25-year veteran of the newspaper and television station company, will step down once its planned sale is complete.

The sale of Tribune to real estate mogul Sam Zell could close as early as today, though a report surfaced Wednesday in the firm's flagship newspaper, the Chicago Tribune, that some of the financiers were having second thoughts.

Investors, once skeptical -- even after government regulators and company shareholders signed off on the plan -- have gained confidence that the $8.2 billion deal will happen. Shares in the past month have drifted steadily higher, closing Wednesday at $33.07, not far from the $34 sale price.

On Tuesday, though, Deutsche Bank Securities analyst Paul Ginocchio downgraded Tribune stock to "hold" and said that, on the remote chance the deal does not get done, shares could drop to as little as $15.

Assuming the transaction happens, FitzSimons will leave the company within the next two weeks and Zell will become chairman. Some speculate Zell also will assume the CEO post.

Tribune owns 23 TV stations, the Chicago Cubs baseball team and several newspapers including the Los Angeles Times, which reported Wednesday that the planned resignation of FitzSimons should not have been a surprise.

"Under FitzSimons, Tribune has had a highly centralized management structure; Zell is known for an entrepreneurial approach," the Times reported.

Some observers also assume that layoffs will come when Zell takes over. But in announcing his intention to resign, FitzSimons said Wednesday that "the company's greatest strength has always been the talent and dedication of its 20,000 employees."

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[SAJ]

TO be completely candid, the only thing I've done in the ''dinosaur media'' sector for the last two years in to buy puts. Bought the McClatchy puts the very day they announced purchase of Knight-Ridder (and the assumption of -- would you believe?? -- 8 billion dollars in additional debt). Made a nice bit on that trade.

Tribune mgmt has fellated deceased canines for years, and I wouldn't wonder but what it's a dandy short, but the fact of the matter is that I haven't followed all the details with Zell and whatnot. So, sadly, can't offer any thoughts on it except tactically. **IF** TRB has LEAPS options, I'd strongly consider looking at them, rather than shorting the stock outright. The January '09 puts, if they exist, look to be a very good vehicle for this.

Good trading to you, and a very Merry Christmas!

[Professional]

Well, when you provide hundreds of outlets for liberal disinformation, you’re bound to get a glut. Now, if any of these papers had decided to play fair and balanced, maybe they’d have something going for themselves? But no, the entire staff was made up with leftys, and they assumed that every person on the planet agreed with their nonsense.