Tribune: After the Fall; Company's Troubles May Cost Studios (Dinosaur Media DeathWatch™)

Broadcasting & Cable ^ | December 15, 2008 | Paige Albiniak

[abb]

Warner Bros., Twentieth Television, Disney-ABC and NBC Universal face multimillion-dollar ramifications after Tribune's announcement last week that it was declaring Chapter 11 bankruptcy protection to restructure its massive debt.

Tribune's 23 TV stations are among the biggest buyers of syndicated shows, including Warner Bros.' Two and a Half Men and Friends, Twentieth's Family Guy, Disney-ABC's Legend of the Seeker and NBC Universal's Maury, Jerry Springer and Steve Wilkos.

Moreover, a deal to launch CBS Television Distribution's T.D. Jakes next fall is pending. The future of that show, which had been cleared on Tribune stations, is now uncertain, according to many sources. A spokeswoman said CTD had no comment. (Related: Watch CTD president John Nogawski discuss T.D. Jakes' "Obama-esque" qualities.)

According to Tribune's bankruptcy filing before a federal court in Delaware last week, Tribune owes Warner Bros. $23.7 million, Twentieth $8.1 million, Disney-ABC $6.2 million and NBCU $4.9 million. Tribune has a few options it can exercise to deal with its outstanding studio debts. It could just proceed with business as usual, paying its bills on time. It could also negotiate longer payout terms with the studios.

Another possibility is that studios will be forced to take writedowns for portions of payments they expected to receive and accounted for, but now will not be paid. Regardless of any revenue hits, studios will likely want to work with Tribune to find ways to preserve future business.

None of the studios or Tribune would comment for this story. But players in the industry say the manner in which the studios resolve this issue could set a precedent should other TV broadcast groups be forced to declare bankruptcy in the rocky months to come, a scenario that wouldn't surprise many industry executives.

“Whatever the studios do for Tribune, they will have to do for everyone else,” says Bill Carroll, VP of programming for Katz Television Group Programming. “If the studios are smart, they will figure out a way that doesn't hurt them that much. They'll all be better off if they have a healthy Tribune to deal with at some time in the near future.”

Tribune's unsecured bills to the studios are relatively small compared to the amount of money it owes its major secured financial-sector creditors: JP Morgan Chase, Tribune's main lender; Merrill Lynch Capital Corp.; Deutsche Bank; Goldman Sachs Group; investment management firm Angelo Gordon & Co.; and hedge fund Highland Capital Management. Tribune's next debt payment of $593 million was due to come up in June but is now stayed because of the bankruptcy. Overall, the company is $12.9 billion in debt while it holds $7.6 billion in assets.

When billionaire investor Sam Zell bought the company in April 2007, Tribune's financials looked stronger, justifying a deal that in hindsight looks incredibly shaky. As Zell said on CNBC last week, “We looked at Tribune before we made our offer. It had basically eroded at about a 3% level in the previous five years. We underwrote [the deal assuming] 6%, and we ended up with 20. And in an operating leverage business like this, a 20% reduction in gross revenue is a disaster on a cash-flow line.”

That said, Tribune's TV stations remain profitable. In its filings, Tribune says it doesn't expect to operate its TV stations any differently than it ever has. And while Tribune may not be shopping as aggressively for new syndicated product in the near-term as it has in the past, no one expects to count the group out as a buyer.

“The positive out of all of this,” says Chuck Larsen, president of October Moon Television, a television distribution consulting company, “is that hopefully Tribune will come out the other side a healthier company that's better able to support its stations.”

[abb]

http://www.miamiherald.com/540/story/810844.html
Newspapers’ voices changed once, and might again

[Milhous]

Now that they find they are losing the flow they are angling to get control of the internet.

The powers that be really ought to bring it on and show the hackers what they got. They probably want to remember their Emerson "When you strike at a king you must kill him."

[Milhous]

The worst of all worlds, of course, would be a monopoly newspaper with a view that permeates its news columns. That hasn't happened yet.

Any notion of monolithic mainstream media apprently goes right over The Miami Herald ombudsman's head.

I hope someone gets "hyper local" in the "information center" and p*sses on his shoe.

Just takes it out and pees right on his shoe, nodding sincerely as he spouts his nonsense.

[abb]

I think we conservatives need to start chunking shoes at the Drive-Bys every chance we get.

[Hardastarboard]

Isn’t Sam Zell, Tribune Co. owner a big time Democrat donor?

I know nothing of Mr. Zell, but based on the fact that he's rich, it wouldn't surprise me if he's a Dem donor. They are the party of the rich, after all.

[abb]

Detroit prequel.

http://gannettblog.blogspot.com/

[abb]

http://newsafternewspapers.blogspot.com/
Out on my limb: Predictions for 2009

http://www.newspaperdeathwatch.com/
The Lowdown on Motown

http://blog.oregonlive.com/myoregon/2008/12/waking_up_to_a_morning_without.html
Waking up to a morning without the newspaper

http://poynter.org/forum/view_post.asp?id=13739
Oregonian stops deliveries in Eugene-Springfield

[abb]

http://www.politico.com/blogs/michaelcalderone/1208/Carney_leaves_Time.html?showall
Carney leaves Time

[abb]

TIME has Come Today

[abb]

http://www.gallup.com/poll/113314/Cable-Internet-News-Sources-Growing-Popularity.aspx
Cable, Internet News Sources Growing in Popularity

[abb]

http://www.mediapost.com/publications/?fa=Articles.showArticleHomePage&art_aid=96642
Pew: Most Will Access Internet Via Mobile By 2020

http://business.timesonline.co.uk/tol/business/industry_sectors/media/article5333712.ece
Read all about it! US newspapers fall prey to the internet and recession

http://www.buzzmachine.com/
Guardian column: Ditchley and the market demand for journalism

[abb]

http://www2.tbo.com/content/2008/dec/14/newspaper-fighting-back/news-opinion-editorials/
This Newspaper Is Fighting Back

http://hamptonroads.com/2008/12/pilot-loses-wealth-experience
Pilot loses wealth of experience

[webstersII]

One interesting aspect of this is that when the tech bubble burst about 10 years ago the enrollment in tech careers at college went down dramatically.

Now that everyone is aware that journalism is in a serious decline the number of graduates in journalism will take a serious decline as well.

I am excited that the weenie do-gooders who want to be journalists so they can ‘change the world’ will decide they would rather get a degree in business. Many people went into journalism a generation ago so that they could ‘make a difference’.

Having these left-wing religious zealots out of the profession will dramatically improve our society.

[abb]

It is my considered opinion that “journalism” isn’t nor ever was a profession. It is a craft.

Mankind managed just fine distributing information amongst itself before journalists came along and decided for us what was and wasn’t news.

[abb]

http://www.denverpost.com/news/ci_11222657
Economy, Internet whipsaw two-newspaper towns

http://www.rockymountainnews.com/news/2008/dec/14/group-comes-together-try-save-rocky/
Group comes together to try and save the Rocky

http://www.iwantmyrocky.com/
Greetings from iwantmyrocky.com

[abb]

http://theoaklandpress.com/articles/2008/12/14/opinion/doc4944876017642127238243.txt
Citizen journalism will shape the new face of the Oakland Press

http://www.portfolio.com/views/blogs/mixed-media/2008/12/15/layoffs-hit-new-york
Layoffs Hit ‘New York’

http://voiceofsandiego.org/articles/2008/12/15/this_just_in/309utpension121508.txt
U-T Halts Pension Contributions

http://www.thedailybeast.com/blogs-and-stories/2008-12-15/why-didnt-zell-tell/full/
How Zell Screwed Up On Blagojevich

http://money.cnn.com/2008/12/14/news/companies/zell_tribune_bankruptcy.fortune/index.htm?postversion=2008121505
The case for and against Sam Zell

http://www.poynter.org/column.asp?id=31&aid=155702
Miami Herald Editor: The Paper is Not the Future

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http://www.editorandpublisher.com/eandp/departments/business/article_display.jsp?vnu_content_id=1003922850
Big Shareholders Drop E.W. Scripps, Trim Media General Stakes

[Grampa Dave]

Maybe they could retool their marketing to appeal to the 48% of America who:

1. Creates over 70% of the new jobs.

2. Fills the ranks of 70% of our armed forces.

3. Pays most of the taxes.

4. Suckles 30% or less of the government services.

5. Expects to work for what they get rather than consider it an entitlement.

Ya think?

---

Naw!

The left wing mediots in charge of the MSM prefers to use the Dixie Chick Marketing Strategy.

They want to po the people you mention as positive targets.

[Travis McGee]

That linked article is totally worth a thread. That is coming, for sure.

A free internet cannot be tolerated by statist would-be tyrants.

They truly believe they must “manage the truth” for the benefit of the proles.

[george76]

the Dixie Chick Marketing Strategy works every time.

Many people still do not get that po’ing at least half of one’s potential customer base has a very predictable result.