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  America
New York Times facing a $400 mil. debt repayment
Tribune Company Goes Broke
Chicago-based news media stalwart Tribune Company is doomed to go broke.

Chicago-based news media stalwart Tribune Company on Dec. 8,2008 announced it is filing for bankruptcy protection, less than 2 years after billionaire real estate mogul Sam Zell took the company private. Geez...and here we thought Zell had the magic touch based on the fact that he sold Equity Office Partners at the peak of the market a couple years back.

The Tribune is "America's largest employee-owned media company," according to the Tribune's website. It owns the Chicago Tribune, Los Angeles Times, Baltimore Sun and Orlando Sentinel newspapers, to name but a few, as well as television stations across the country. The Tribune is also the owner of the Chicago Cubs baseball team, which is reportedly not being included in the Chapter 11 filing.

This news comes on a day when many of the financial institutions involved with the Tribune deal — such as JP Morgan Chase & Co. (JPM) and Goldman Sachs Group, Inc. (GS) — are up 10% or more on the day. However, all of the publicly traded companies with a hand in the Tribune buyout — which was itself cited as costly and time-consuming; understandable in retrospect: a $13 billion company taken private just as the recession in the U.S. began — are facing severe downward earnings pressure and continually lowered estimate revisions.

Media conglomerates have shown signs of struggle recently, as well, with massive layoffs at Viacom, Inc. (VIA) and General Electric's (GE) NBC Universal announced only days ago. To what extent will Tribune's bankruptcy status add to the growing totals of America's unemployed?

In the meantime, - New York Times Co., facing a $400 million debt repayment in May, may borrow as much as $225 million against its Manhattan headquarters.

The third-largest U.S. newspaper publisher hired commercial real-estate firm Cushman & Wakefield Inc. to help obtain financing through a mortgage or a sale-leaseback agreement, spokeswoman Catherine Mathis confirmed today in an e-mail.

New York Times, which finished the third quarter with $46 million in cash and equivalents, must refinance or repay a $400 million credit line that expires in May. The company has about $366.3 million remaining under a second credit agreement that becomes payable in June 2011.

To make up for declining advertising sales, the publisher of the namesake newspaper and Boston Globe, slashed its dividend by almost three-fourths last month and has also eliminated jobs. The company has $672.5 million in long-term debt.

The New York Times reported the plans for its building yesterday, citing Chief Financial Officer James Follo.

The company moved its corporate offices and flagship newspaper into the 52-story tower, designed by Renzo Piano, in June 2007. The Eighth Avenue building, west of Times Square, is jointly owned with Forest City Ratner Cos.

Shareholders Firebrand Partners and Harbinger Capital Partners have pressured the company this year to invest more in Internet properties, sell or mortgage the skyscraper and sell stakes in professional sports teams and regional newspapers. The hedge funds dropped their proxy challenge fight after the company offered them two board seats.




 

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