Debt-Laden Tribune Co. Files For Bankruptcy

The Chicago-based Tribune Co., one of the nation's most prominent newspaper publishers, filed for bankruptcy today. The company owns the Los Angeles Times, the Chicago Tribune and The Baltimore Sun, plus five other daily papers, 23 television stations and the Chicago Cubs.

Tribune was already struggling when real estate magnate Sam Zell took it over a year ago. And it's not alone in that regard. The E.W. Scripps Co. is seeking suitors for the Rocky Mountain News, the second-largest paper in Denver. McClatchy is reportedly intending to try to sell the Miami Herald. And the New York Times Co. has announced it intends to borrow $225 million against the value of its new headquarters in midtown Manhattan.

Zell's highly leveraged takeover of Tribune left the company $13 billion in debt, and it had little room to maneuver as the economy collapsed. Tribune made deep cuts and sold the large daily Newsday, but a projected sale of the Cubs has been delayed by the credit crunch affecting the financial markets.

In an e-mail to employees on Monday, Zell said the newspapers will continue publishing and that there are no new rounds of layoffs planned.

The bankruptcy could give the company breathing space to negotiate more favorable terms with lenders. According to its bankruptcy filings, Tribune has more than enough money to make a $70 million payment due Monday. But the company appears to be in danger of falling afoul of some of the financial requirements set out in its borrowing agreements. And there are far larger bills looming ahead.

Tribune Files For Chapter 11 Bankruptcy

The Tribune Co. — publisher of five Pulitzer Prize-winning newspapers and owner of the Chicago Cubs baseball team — filed for bankruptcy protection Monday in an effort to cope with almost $13 billion in debt.

The company listed $7.6 billion in assets and some $12.97 billion in debt in its filing in U.S. Bankruptcy Court in Delaware. JPMorgan Chase and Merrill Lynch were listed as the company's largest unsecured creditors.

In a statement on its Web site, Tribune said its newspapers and television stations will continue to operate normally as the company restructures. The company made routine motions to continue its operations, including maintaining payroll and health benefits for employees, which are expected to receive approval within a few days. The Chicago Cubs and Wrigley Field were not part of the Chapter 11 filing, the company said.

"Factors beyond our control have created a perfect storm — a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt," Tribune Chairman and Chief Executive Officer Sam Zell said in a statement.

Founded in 1847, Tribune — the publisher of the Chicago Tribune and Los Angeles Times — took on massive debt when it went private last year under a deal led by Zell, a Chicago real estate mogul.

The company has tried to raise money and cut costs by selling off other interests and axing jobs. Earlier this year, Tribune sold Long Island, N.Y., newspaper Newsday to Cablevision Systems Corp. Tribune also sold a 10 percent interest in online job site CareerBuilder to Gannett Co. for $135 million.

In addition, the company has cut jobs at its newspapers, including eliminating 80 editorial jobs earlier this year at the Los Angeles Times, the country's fourth-largest newspaper by circulation.

The company has also wielded the ax at The Baltimore Sun, the Orlando Sentinel and The Hartford Courant and other newspaper and television stations.

Newspapers around the country have been reeling as circulation rates decline. Last week, E.W. Scripps announced that the Rocky Mountain News was up for sale.

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