Status of Newspaper Publishers That Filed Ch. 11

• Star Tribune Holdings Corp.
• Tribune Co.
• Sun-Times Media Group Inc.
• Philadelphia Newspapers LLC
• Journal Register Co.
• Freedom Communications Holdings Inc
• Creative Loafing Inc.

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Will OC Register Move From Santa Ana to Times OC Building in Costa Mesa?

Is a "for sale" sign coming to the Orange County Register's Santa Ana complex?

​Not that long ago, the Orange County Register and Los Angeles Times were embroiled in a bitter circulation battle that resulted in huge resources being pumped into this region, competing "hyper-local" community papers popping up like weeds and both papers reaping the spoils of some of the highest advertising rates in the country.

My, how times have changed. With the daily print newspaper industry in major retreat mode, the Times has left only a skeleton crew at its Orange County headquarters on Sunflower Avenue in Costa Mesa. While owner Sam Zell has yet to carry through with a previously revealed desire to snatch up the Register--which just filed for Chapter 11 bankruptcy this week--the Times will soon be distributing the Register and they already jointly produce a weekly advertising supplement. [Click for MORE]

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Sun-Times Gets Offer of $5 Million

A Chicago investor offered $5 million to buy the publisher of the Chicago Sun-Times, in a deal that could keep the struggling tabloid in business.

Jim Tyree, chairman and chief executive of investment firm Mesirow Financial, is leading a group that pledged the sum for Sun-Times Media Group Inc. in a bankruptcy auction. Mr. Tyree's group will be the "stalking horse," or lead, bidder as the company solicits other offers. It valued its assets at $310 million as of Dec. 31.

Tyree also agreed to assume about $20 million in liabilities, Sun-Times Media Group said Tuesday. A bankruptcy court must approve the terms and outcome of the auction. [Click for MORE]

• Employees to also pay for Sun-Times sale

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Freedom, OC Register, Plan to File For Chapter 11

Freedom Communications Inc., the owner of the Orange County Register, is expected to declare bankruptcy this week, according to people familiar with the situation, the latest in a string of Chapter 11 filings in the battered newspaper business.

The company, majority owned for more than 70 years by the Hoiles family, has reached agreements with its lenders to restructure its debts, according to these people.

With annual revenue of about $700 million, Freedom owns the Register and more than 30 other daily papers and eight TV stations. Earnings before interest, taxes, depreciation and amortization -- a popular measurement for leveraged companies -- have declined about 75% over the past five years to about $50 million. [Click for MORE] Sphere: Related Content

Tribune Bondholders Fault Zell Takeover

Disgruntled Tribune Co. bondholders have asked a U.S. bankruptcy judge to let them investigate Sam Zell's 2007 buyout of the newspaper-and-television chain in an effort to derail a plan that would hand the company over to its banks.

The filing, made late Wednesday, calls the $8.2 billion transaction a "fraudulent conveyance" that left Tribune insolvent from the onset of the 2007 deal. It accuses senior lenders led by J.P. Morgan Chase & Co. of completing a leveraged buyout they should have known would push the company into bankruptcy.

"Fraudulent conveyance" is a legal term most often used in bankruptcy court, in which creditors allege a company has used assets in a way unfair to creditors. In the context of leveraged buyouts, creditors can argue a deal loaded up a company with too much debt, leaving it undercapitalized and unable to meet future obligations. [Click for MORE]

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Who Gets to Grow Up to Be Citizen Kane?

Simon Dumenco of AdAge writes:

I've been thinking about the life cycle of media moguls -- and the future of the very idea of the media mogul -- given all the recent rumors surrounding relative spring chicken Sam Zell, chief of the Tribune Co., the newspaper and broadcasting conglomerate. Just 67 and still invariably described as a "motorcycle-riding billionaire," Zell, having massively botched his attempt at media moguldom since taking control of Tribune in 2007, is said to be on his way out. Either forced out by creditors (if you believe the Chicago Sun-Times) or reduced to simply abandoning the wreckage of his failed investment (if you believe Murdoch's New York Post).

The big man walks away a small man -- diminished in the eyes of history. He could have shuffled off this mortal coil with his legend as a real-estate genius intact, but instead he'll mostly be remembered for helping to drive the Chicago Tribune and the Los Angeles Times and his other papers more quickly into the ground. Surely he'll be the last big man to try to become even bigger through media moguldom. [Click for MORE]

• How Zell botched Cubs deal

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Reader's Digest Files Chapter 11 Bankruptcy

Reader's Digest Association Inc., publisher of the iconic general interest magazine that began gracing American homes in 1922, on Monday filed for Chapter 11 bankruptcy protection as it faces falling print circulation in the Internet age and looming debt payments.

Known for its heartwarming stories about American life as other publications moved toward edgier fare, the company's flagship Reader's Digest magazine has seen its U.S. circulation drop from a peek of more than 17 million in the 1970s to just above 8 million last year.

Magnifying the publishing world's woes is an advertising slump that already has led to the closing of several high-profile magazines, including Conde Nast's Portfolio, Domino and Blender. [Click for MORE]

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Zell's ESOP Fable

Tribune Employees Are Shortchanged

Tribune's short-lived experiment with employee ownership is coming to an end.

While Tribune is still navigating the bankruptcy process, the creditors are unlikely to keep the employee stock ownership plan, leaving workers with worthless shares, a source involved in the negotiations said.

In 2007, real-estate tycoon Sam Zell used the stock plan, called an ESOP, to gain tax benefits on the $8.2 billion buyout of the struggling company.

The plan made employees official owners with 100 percent of the equity, but they have no say over management or the board. In the bankruptcy, they are viewed as common shareholders with less claim than other creditors. [Click for MORE]

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Operating Management Will Stay With TribCo

Responding to recent media reports he called "inaccurate," a top Tribune Co. executive sent a note to the company's employees Thursday saying that Tribune Co.'s current "operating management" intends to stay at the company following the Chicago media conglomerate's emergence from bankruptcy court.

Randy Michaels, Tribune's chief operating officer, also termed "absurd" suggestions in the reports that the company might be liquidated as part of its Chapter 11 plan of reorganization. [Click for MORE]
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Zell Gives Up

Report: Ready to leave TribCo.

The New York Post is reporting that Zell is "ready to walk away" from the Tribune Company, ending one of the most inglorious chapters of newspaper ownership in Chicago history.

And just to make sure Zell has gotten the message from angry creditors already reportedly organizing a putsch, those lenders have now asked a bankruptcy court for permission to investigate Zell's kinky and controversial $8.2 billion takeover of the media giant,according to the Sun-Times. [Click for MORE]

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Zell May Give Up Claim to Buy Tribune Stake

Steve Greenberg via LA Observed

Tribune Co. chief executive Sam Zell is close to giving up his claims to buy a 40 percent stake in the company, the New York Post said, citing a source familiar with the matter.

Zell looks ready to give up a warrant, which he negotiated as part of his $8.2 billion deal to take the company private in 2007, according to the paper.

The warrant gives Zell the right to buy about 40 percent of the company for $500 million and is the basis of his control over Tribune Co, the paper said. [Click for MORE]

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Tribune Co. Creditors Seek Special Counsel to Probe Buyout, Could Sue to Recover Money

Tribune Co. creditors have asked the bankruptcy court for permission to hire special counsel to further investigate the $8.2 billion leveraged buyout of the Chicago-based media company engineered by real estate magnate Sam Zell.

The inquiry is common practice when a bankruptcy follows closely on the heels of an LBO, said bankruptcy experts. Zell closed the transaction that took Tribune Co. private in December 2007. The new debt obligations were too big a burden amid rapidly declining advertising revenues, sending the company, parent of the Chicago Tribune, into bankruptcy in December 2008.

Creditors have not filed a lawsuit seeking to recover money against parties that were involved in the going-private transaction, which established an employee stock ownership plan to become majority owner of the company. But the court filing on Thursday signaled that they are considering pursuing litigation, said Chicago-based restructuring expert Bill Brandt. [Click for MORE] Sphere: Related Content

A Textbook Bad Manager Gets Ready to Go

From Workforce Management:

[Sam] Zell is the foul-mouthed CEO of Tribune Co., the big media company that owns not only television and radio stations but also big newspapers including the Los Angeles Times, Chicago Tribune and Baltimore Sun. He was in over his head from the moment he cut the deal to take control of Tribune, and his over-the-top hubris, chronic arrogance and terribly shortsighted decision-making (by both Zell and his management minions) have helped push Tribune into Chapter 11 bankruptcy.

It’s a bad management trifecta that led me to award Zell with the 2009 Workforce Management Stupidus Maximus Award, given annually to the “most ignorant, shortsighted and dumb workforce management practice of the year.”

Well, we may be starting to see the end of Sam Zell, at least as the guy controlling Tribune. The Chicago Sun-Times reports that “Sam Zell’s days as a media titan in Chicago are nearly over. … Eight months after [Tribune’s bankruptcy] filing, two sources familiar with the process said creditors are working on a reorganization plan that elbows Zell aside. The creditors, including investment banks owed $8.6 billion from Zell’s Tribune takeover, would stage a takeover of their own and sell off the company’s newspapers and broadcast stations as they see fit.” [Click for MORE]

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Zell Headed Out?

From LAobserved.com/biz:

Chicago Sun-Times is reporting that Tribune Co. creditors apparently have had enough of CEO Sam Zell and are working on a reorganization plan that would essentially break up the company and get him out. Story lacks detail and the process is still ongoing, but there have been rumblings in recent weeks that the creditors want out. Before they can file a reorganization plan, however, the company must be given a chance to submit its own plan. A bankruptcy judge has given Tribune until Nov. 30 to do so.

William Brandt Jr., a corporate turnaround expert not involved in the case, said enough time has passed so that creditors and the debtor want to cut losses and save face. He said an honorable exit is especially important to Zell, who might need investment banking help for future deals.

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Still, Tribune financial reports filed with the bankruptcy court show recent improvement. The company's cash on hand rose to $740.5 million as of June 28, up from $702 million in late May. It reported profitable operations in June aside from debt obligations, but for the period from Dec. 8, 2008 to June 28 it said it lost $836.5 million. The numbers don't include units such as the Cubs, which were left out of the bankruptcy filing.

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Eagle Times of Claremont, N.H., Closing Friday

The Eagle Times newspaper in Claremont, N.H., is filing for bankruptcy and shutting down.

Publisher Harvey Hill sent an e-mail to staffers Thursday saying Friday's edition of the paper will be its last.

He told employees he did his best to keep the daily paper going, but the economy and changes in the newspaper industry have made it impossible to survive. He said employees will get their last paycheck next week and will have health coverage through the end of the month.

The paper covers the city of Claremont and the surrounding area, including several towns in Vermont.

Hill did not return a message for comment. -- Associated Press Sphere: Related Content

Tribune Co. Profitability Continues to Deteriorate

Tribune Co.’s financial picture deteriorated even more this year as declining advertising sales continued to hammer the newspaper industry, the Chicago media conglomerate’s bankruptcy filings show.

The company is much less profitable than before its filing in December and is burning through cash, financial statements for the first five months of the year show. Tribune’s revenue declined about 23% in the first half of 2009, according to an estimate by Chicago-based Morningstar Inc. analyst Tom Corbett, who reviewed the company’s financials. [Click for MORE]

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Storms Still Ahead for the Chicago Tribune

For the Chicago Tribune, Tuesday Dec. 10, 2008 was a fateful day.

On that day, the newspaper published its in-depth investigation of the Gov. Rod R. Blagojevich scandal; two days earlier, its parent company, Tribune Co., filed for Chapter 11 bankruptcy.

“That day said the business model is broken,” editor Gerould W. Kern said at a May 21 panel of industry leaders titled “Make Media Matter.”

Before and since December, the newspaper suffered numerous layoffs, lower print circulation and a $13 billion debt load which real estate mogul Sam Zell took on when he purchased the company in April 2007. Zell invested $315 million in equity in the company in an $8.2 billion dollar buyout.

“Reporters are losing their jobs and people are getting lower quality,” said Rick Edmonds, media business analyst for the Poynter Institute, a nonprofit industry education resource. “It’s a lot to do with helping Sam Zell pay the debt, which he isn’t able to do completely anyway.”

Not all newspapers are saddled with debt. But the Chicago Tribune has plenty of company in the pool of struggling papers trying to conquer the Internet and other new technologies, while seeking to overcome economic challenges and attract younger audiences. Experts fear the Tribune’s financial trouble is negatively affecting the credibility of the paper, and with advertising revenues falling, the Tribune must search for other revenue streams and ways to deliver its content. [Click for MORE] Sphere: Related Content

Chicago Sun-Times Files for Bankruptcy

• 5 newspaper companies that have filed Chapter 11
• Chicago's Sun-Times Media Files For Chapter 11
• Sun-Times Files for Bankruptcy
• Chicago Sun-Times parent files for bankruptcy
• Sun-Times Media Group Files For Bankruptcy Protection
• Chicago dailies tell different bankruptcy stories
• Chicago’s Sun-Times Media Seeks Bankruptcy Protection
• Chairman's letter to Sun-Times employees
• Sun-Times' Money Problems Include Conrad Black, Advertising
• Sun-Times files for Chapter 11
• Sun-Times Media Group Bankruptcy: Who's Owed What?

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More Newspaper Shake-Ups Loom With Chapter 11

With the four owners of 33 U.S. daily newspapers seeking bankruptcy protection in the past 2 1/2 months, even more upheaval looms for an industry clearly gasping for survival.

Analysts doubt those newspaper companies will be able to emerge from Chapter 11 bankruptcy protection without agreeing to lenders' demands for radical changes, such as switching some of their newspapers exclusively to online delivery.

Of course, the newspaper publishers already have been mulling dramatic makeovers, including scrapping their print editions, and it's still not clear whether their creditors can come up with any better ideas. But that probably won't discourage exasperated lenders from trying to shake things up.

"These first few bankruptcy filings are like the canaries in the coal mine," said John Penn, a bankruptcy lawyer in Fort Worth, Texas. "It's almost a certainty that they are going to have to change their business models because the old ones aren't working." [Click for MORE]

• Boss Got Raise As Philly Papers Tanked
• Tribune Co. wins right to pay $8.8 mil in bonuses
• Financial Times Aims to Cut Costs
  
• Philadelphia Inquirer’s Bankruptcy Costs Owners Group
• 4 newspaper companies that have filed Chapter 11
• Trib gets break on legal fees
• Bankruptcies Threaten To Shrink Newspaper Industry
• The Bankruptcy Files: The Journalism Edition
• The Chicago Journalism TownHall: Panel Discussion
• The Chicago Journalism TownHall: Community Dialogue
• How much is the future of journalism going to cost?
• Save newspapers, or let the dinosaurs die?

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Philly Newspaper Owner Files for Chapter 11

The owner of The Philadelphia Inquirer and Philadelphia Daily News filed for Chapter 11 bankruptcy protection Sunday in an effort to restructure its debt load.

Philadelphia Newspapers Inc., owned by Philadelphia Media Holdings LLC, is the second newspaper company in two days, and fourth in recent months, to seek bankruptcy protection.

"This restructuring is focused solely on our debt, not our operations," chief executive officer Brian P. Tierney said in a statement. "Our operations are sound and profitable."

The filing Sunday indicated the company has between $100 million and $500 million in assets and liabilities in the same range. The company said it will continue the normal operations of its newspapers, magazines and online businesses without interruption during the debt-restructuring process. [Click for MORE]

• Pennsylvania Newspaper Bankruptcies Signal More Trouble Ahead
• Philadelphia papers owner files for bankruptcy protection
• Philadelphia Papers File Chapter 11
• Philadelphia Newspapers seeking bankruptcy
• More Newspapers File for Chapter 11
• Boss Got Raise As Philly Papers Tanked

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