Skip to comments.Asset write-down sends Tribune (LA Times, et al)to $4.5 billion loss (Dinosaur Media DeathWatch™)
Posted on 08/13/2008 1:08:33 PM PDT by abb
Privately held Tribune Co. Wednesday reported a $4.5 billion loss in the second quarter, largely on a charge reflecting a decrease in the value of its assets, and said advertising revenue at its newspapers dropped 15%. Tribune has endured numerous financial difficulties since it was acquired by real-estate developer Sam Zell in an $8.2 billion deal that took the business private. The financing of his transaction involved the creation of an employee stock program that has incurred a significant amount of debt.
The company lost $4.53 billion in the latest three months, including a $3.8 billion charge on a decrease in the value of its assets stemming from steep losses in advertising revenue. A year earlier, Tribune earned $36.3 million.
Revenue fell 6% to $1.10 billion. Publishing revenue dropped 11% to $700.6 million, reflecting a 15% decline in advertising revenue. Classified advertising revenue, the traditional mainstay of newspapers, fell 26%, as real-estate revenue dropped 26% and help-wanted tumbled 33%.
National advertising revenue fell 12%, with particular weakness in the movie and telecom/wireless categories. Retail ad revenue dropped 8%. For nearly four years, newspapers have seen precipitous declines in print advertising revenue, as traditionally heavy buyers of print ads such as automakers and airlines experienced slumps of their own. More recently, a housing downturn severely hampered real-estate ad sales, and an increasing number of classified transactions have gone to Craigslist and other Web-based services that compete with newspapers.
Tribune's massive debt load has added to the problems it shares with the rest of the industry. To pay it down, Tribune has declared itself willing to sell many of its assets. The company recently agreed to sell a 97% stake in Long Island, N.Y., newspaper Newsday to Cablevision Systems (CVC) for $650 million.
(Excerpt) Read more at marketwatch.com ...
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Ask Sam Zell. Purchase a dinosaur newspaper for $8 billion and wait two years for it to degrade to $1 billion.
OMG that got hurt
the don’t seem to learn.
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I believe Sam Zell put up around $250 million of his own money for the purchase — the remaining $7.75 billion is done with borrowed cash.
If it craters, he’s not out all that much cash (well, not that much by Sam Zell standards) and the bond holders will be left holding the bag.
The figure I saw for him was like maybe $350 million. He got one of the Greenspuns to put up $150 or so.
Ya gotta love Sam Zell - he is stirring the pot in the world of newspapers. They hate him and he doesn’t give a damn.
Tell me (tell me)
How to be (how to be)
Zell didn't put up $8 billion of his own money.
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