Tribune is in talks to prepare a potential bankruptcy filing. All the newspaper publishers are in trouble. After Sam Zell's acquisition of the paper and the piling on of $12 billion in debt, the company has been on shaky ground. The most immediate issue is the breach of a covenant keeping debt to 9x adjusted earnings. Typically, concessions can be granted. In Tribune's case the covenants are already very loose.
I guess now is the time to ask what were they thinking. Levering up a company that much to begin with is shaky. When it is in an industry that is in decline, even more so. Few newspapers have shown that they can make substantial revenue online, and paper sales have been falling. So many of these deals seem like they would only work in the best of circumstances, and really we should have seen this coming.
http://online.wsj.com/article/SB122868944355686385.html?mod=rss_whats_news_us_business
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