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Lenders may get control of Tribune Co. (Dinosaur Media DeathWatch™)
Chicago Tribune ^ | June 8, 2009 | Michael Oneal

Posted on 06/08/2009 2:47:27 AM PDT by abb

Chicago-based Tribune Co. and its creditors are in the early stages of negotiating a plan of reorganization in U.S. Bankruptcy Court that sources said likely would transfer control of the troubled media conglomerate from Chicago billionaire Sam Zell to a group of large banks and investors that holds $8.6 billion in senior debt.

The plan is still taking shape, the sources said, and much could change as negotiations continue.

But the general contours of a new capital structure are coming into focus, and the plan centers on a debt-for-equity swap that probably would give the senior lenders a large majority ownership stake in the reorganized company.

A source with knowledge of the situation said the plan would wipe out a $90 million warrant Zell negotiated as part of his $8.2 billion deal to take the company private in 2007. The warrant gives the Tribune Co. chairman the right to buy about 40 percent of the company for $500 million and is the basis of his control over Tribune Co., which owns the Chicago Tribune.

Zell also holds a $250 million note representing a loan he made to the company as part of the going-private transaction. That note, however, is near the bottom of the hierarchy of claims in Tribune Co.'s Chapter 11 bankruptcy case, and the source said it is unlikely it would retain any value as the capital reorganization proceeds.

Bankruptcy experts said the plan's outline raises questions about whether the senior lender group would want to retain Zell and his management team or seek new leadership for the company. It also poses the question of whether Zell would want to stay without a large ongoing stake in the company.

snip

(Excerpt) Read more at chicagotribune.com ...


TOPICS: Business/Economy; Culture/Society; Extended News; News/Current Events
KEYWORDS: advertising; dbm; newspapers; tribune
The vultures are circling. The smell of death wafts across the savanna...
1 posted on 06/08/2009 2:47:28 AM PDT by abb
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To: abb

2 posted on 06/08/2009 2:47:58 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: 04-Bravo; aimhigh; andyandval; Arizona Carolyn; backhoe; Bahbah; bert; bilhosty; Birch T. Barlow; ..

ping


3 posted on 06/08/2009 2:48:24 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://recoveringjournalist.typepad.com/recovering_journalist/
That Loud Yelp You Hear is Newspapers Being Squeezed—Again

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2009/06/marshall-herskovitz-says-he-has-secret-plan-to-rescue-tv-pilot-system.html
Marshall Herskovitz says he has secret plan to rescue TV pilot system


4 posted on 06/08/2009 2:49:42 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.nytimes.com/2009/06/08/business/media/08globe.html?ref=business
After Months of Tension, Globe Votes on Cuts

http://www.nytimes.com/2009/06/08/business/media/08weinstein.html?ref=business
Weinstein Company Takes Step to Ease Debt

http://www.nytimes.com/2009/06/08/business/media/08iht-free.html?ref=business
Free Papers Faltering in Downturn


5 posted on 06/08/2009 2:54:41 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://adage.com/article?article_id=137133
Not That You Were, TV Networks, but Don’t Count on Chrysler in the Upfront

http://adage.com/digital/article?article_id=137135
Maybe Hulu Really Wants to Take over the (TV) World

http://www.broadcastingcable.com/article/278595-FCC_Cuts_4_Stations_From_List_Of_Ones_Said_To_Go_Dark_June_12.php
FCC Cuts 4 Stations From List Of Ones Said To Go Dark June 12


6 posted on 06/08/2009 3:26:30 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.poynter.org/column.asp?id=101&aid=164801
Boston Globe Union Weighs High-Stakes Vote Monday


7 posted on 06/08/2009 3:49:42 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.editorandpublisher.com/eandp/index.jsp
E&P ‘Question of the Day’: Will Most Newspapers, in Print, Be Gone in 10 Years? Join the Debate Now


8 posted on 06/08/2009 4:40:09 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

Hmmm.... There were no mention of the unions? Will they end up with no stake? It was the pressrooms that made the company great ya know


9 posted on 06/08/2009 4:47:33 AM PDT by bert (K.E. N.P. +12 . The boy's war in Detriot has already cost more then the war in Iraq.)
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To: bert

I’ve not read too much about the situation with the Tribune’s unions. Since they’re in bankruptcy, all that’s up in the air, I suspect.

I’m intrigued with the rise and fall of the Chandler clan. Much like, the Ochs and Sulberger families at the NY Times, the Chandlers built an immense publishing fortune and now is all gone.

Gone with the wind...

I have on my to order list with Amazon a bio of Otis Chandler.

http://books.google.com/books?id=FCvoJFg5jjYC
Privileged son: Otis Chandler and the rise and fall of the L.A. Times dynasty
By Dennis McDougal


10 posted on 06/08/2009 4:57:00 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: bert

A little flashback...

http://spectator.org/archives/2008/08/08/no-otis-chandler
No Otis Chandler

By George Neumayr on 8.8.08 @ 12:08AM


11 posted on 06/08/2009 5:00:06 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.boston.com/business/articles/2009/06/08/contract_vote_today_for_guild_as_drivers_approve_globe_cuts/?page=full
Contract vote today for Guild as drivers approve Globe cuts


12 posted on 06/08/2009 5:04:29 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

So the banks take over the Tribune from Zell..The same banks that are under the Treasury thumb because of TARP?....start connecting the dots....


13 posted on 06/08/2009 5:12:20 AM PDT by ken5050
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To: ken5050

Perhaps. But there’s no ‘there’ there. Very little property, plant or equipment to liquidate. The only ‘asset’ that they have is an ongoing concern that distributes ink on paper with paid advertising.

Not long for this world.


14 posted on 06/08/2009 5:16:01 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

Why don’t some Globe employees take the train don to NYC and picket outside Punch’s apartment building?


15 posted on 06/08/2009 5:19:57 AM PDT by ken5050
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To: abb

http://timwindsor.com/2009/06/04/livetweeting-the-end-of-local-news/#idc-container
Livetweeting “The End of Local News?”

http://newsosaur.blogspot.com/
Facing up to life after print for newspapers


16 posted on 06/08/2009 5:24:32 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

17 posted on 06/08/2009 5:26:03 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.medialifemagazine.com/artman2/publish/Newspapers_24/Deal_or_no_deal_Boston_guild_votes.asp

Deal or no deal: Boston guild votes
The Globe’s biggest union may reject deal with NYT Co.


18 posted on 06/08/2009 5:29:35 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb
My brief analysis of the story you posted

From the article: Chicago-based Tribune Co. and its creditors are in the early stages of negotiating a plan of reorganization in U.S. Bankruptcy Court ...

These things almost always take years, unless you are Chrysler and the government is able to screw your creditors. Come back in 18 to 24 months from now to get the real story.

From the article: The plan is still taking shape, the sources said, and much could change as negotiations continue.

In other words, this "news article" is a speculative piece, like so much other garbage that is called news these days.

From the article: The plan centers on a debt-for-equity swap that probably would give the senior lenders a large majority ownership stake in the reorganized company.

Yep. Secured creditors get everything until their claims are satisfied, unsecured creditors are next, stockholders come last -- if anything remains at that point.

From the article: The plan would wipe out a $90 million warrant Zell negotiated as part of his $8.2 billion deal to take the company private in 2007.

Yep. As noted above, stockholders come last.

From the article: The plan's outline raises questions about whether the senior lender group would want to retain Zell and his management team or seek new leadership for the company.

That's assuming the Tribune even survives. Most companies with negative cash flow from operations are wound down, unless they can trim some fat somewhere -- like from union contracts. My guess, this was done long before the Tribune filed.

The question of retaining Zell and his management team is moot. They had their chance and lost. Almost everybody worth having has already moved on.

Bottom line: The twits are are cooking up a "news article" about themselves, based in part on established legal procedures, and in part on wishful thinking. In doing so, they are merely demonstrating their ignorance of basic business principles and business law.
19 posted on 06/08/2009 5:51:11 AM PDT by Zakeet (Obama: Always wrong, never in doubt.)
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To: abb

What a novel concept.

Lenders may get control of a Bankrupt corporation.

Unless 0b0z0 appoints a Newspaper Czar and lets the union members own and control the Newspaper.

Can’t happen. Look at Government Motors and Chrysler.


20 posted on 06/08/2009 5:56:03 AM PDT by Grampa Dave (Does Zer0 have any friends, who are not criminals, foriegn/domestic terrorists, or tax cheats?)
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To: Zakeet

Good analysis. The negative cash flow is the chicken bone in the throat. They’re almost done for. Notice how the deal to sell the Cubs hasn’t closed yet.

Soon - very soon - there simply won’t be any money in the till to buy paper and ink and pay the pressmen to roll the presses.


21 posted on 06/08/2009 5:56:15 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJ7H3gHnWjS4
CBS Cut to Lowest Investment Grade by S&P on Ad Drops

http://www.independent.co.uk/news/media/online/andrew-keen-it-is-up-to-the-unwired-class-to-get-online-and-save-themselves-1699131.html
Andrew Keen: It is up to the unwired class to get online and save themselves


22 posted on 06/08/2009 6:10:08 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb
"Bankruptcy experts said the plan's outline raises questions about whether the senior lender group would want to retain Zell and his management team or seek new leadership for the company."

Matters only to zerO.
Otherwise who the hell cares about the bod if the head's dead.

"The vultures are circling. The smell of death wafts across the savanna..."

Uh-huh. :^)

23 posted on 06/08/2009 7:11:39 AM PDT by Landru (Arghh, Liberals are trapped in my colon like spackle or paste.)
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To: Landru

24 posted on 06/08/2009 7:16:54 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.time.com/time/business/article/0,8599,1902202,00.html
Can Computer Nerds Save Journalism?


25 posted on 06/08/2009 7:18:30 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.forbes.com/2009/06/05/internet-advertising-newspapers-business-media-san-diego.html
San Diego News Shoot-Out


26 posted on 06/08/2009 7:20:28 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.broadcastingcable.com/article/278632-New_York_Pool_WNYW_WNBC_WCBS_WPIX.php
New York Pool: WNYW, WNBC, WCBS, WPIX
Fox, NBC, CBS and Trib join forces in Gotham

http://www.broadcastingcable.com/article/278615-Report_Broadband_Adoption_Efforts_Must_Eliminate_Access_Barrier_.php
Report: Broadband Adoption Efforts Must Eliminate “Access Barrier”
Report on broadband adoption efforts says government, industry must sell broadband as necessity, not luxury.


27 posted on 06/08/2009 8:45:58 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.adweekmedia.com/aw/content_display/mediaupfront/news/broadcast/e3i0fe06f39ca1404325c30b4cd638baa20?ref=adweek
Upfront Market: Auto Spend Driven Down This Year


28 posted on 06/08/2009 8:48:21 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.dailyfinance.com/2009/06/08/tribune-and-sam-zell-good-riddance/
Tribune and Sam Zell: Good riddance


29 posted on 06/08/2009 9:35:40 AM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

I don’t want Chapter 11, I want Chapter *7* - Liquidation Baby!!!


30 posted on 06/08/2009 9:50:32 AM PDT by GOPGuide
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To: abb

http://tunedin.blogs.time.com/2009/06/08/if-the-journalism-business-fails-who-pays-for-journalism/
If the Journalism Business Fails, Who Pays for Journalism?

http://www.niemanlab.org/2009/06/charging-a-lot-for-news-online-the-newport-daily-news-new-experiment-with-paid-content/
Charging (a lot!) for news online: The Newport Daily News’ new experiment with paid content

http://www.baltimoresun.com/entertainment/tv/bal-ae.zontv07.1jun07,0,1149975.story
Recession redrawing local media landscape, with no end in sight

http://pressherald.mainetoday.com/newsupdate.php?updates/22-at-blethen-maine-told-theyll-lose-jobs
22 at Blethen Maine told they’ll lose jobs


31 posted on 06/08/2009 2:30:29 PM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.ajr.org/Article.asp?id=4789
The Death of Slow Journalism


32 posted on 06/08/2009 3:11:15 PM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://www.stillanewspaperman.com/2009/06/08/a-little-humanity-please/
A little humanity, please


33 posted on 06/08/2009 3:39:40 PM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://mediadecoder.blogs.nytimes.com/2009/06/08/voting-underway-at-boston-globe-over-proposed-pay-cuts/
Voting Underway at Boston Globe Over Proposed Pay Cuts


34 posted on 06/08/2009 3:55:40 PM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb
Voting Underway at Boston Globe Over Proposed Pay Cuts

Staying tuned...can't wait to see how this turns out.

35 posted on 06/08/2009 4:36:44 PM PDT by andyandval
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To: andyandval

http://www.csmonitor.com/2009/0609/p02s02-ussc.html
Boston Globe: A vote on the future of newspapers?


36 posted on 06/08/2009 4:42:10 PM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb

http://online.wsj.com/article/SB124446065172493915.html
Boston Globe Union Casts Crucial Votes


37 posted on 06/08/2009 5:03:17 PM PDT by abb ("What ISN'T in the news is often more important than what IS." Ed Biersmith, 1942 -)
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To: abb
The union, the Boston Newspaper Guild, has said that if the current contract offer is rejected and the Times imposes a 23 percent across-the-board wage cut, it will file a grievance with the National Labor Relations Board (NLRB), charging the Times had negotiated in bad faith. That could tie the paper up in legal proceedings for months, if not years, while the NLRB makes a determination.

A lose-lose situation for the union.

Go ahead and file that grievance...the pay cut will be in place no matter.

If they win in at the NLRB in about four years there will be nothing left anyway.

38 posted on 06/08/2009 5:06:06 PM PDT by andyandval
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