The US media giant, Tribune Company, is reported to be filing for court protection from bankruptcy. The owner of the Los Angeles Times and the Chicago Tribune, plus six other leading metropolitan dailies, has been trying to renegotiate its $12bn (£8.2bn) debt burden.
Tribune is said to have hired the investment bank Lazards as its financial adviser and law firm Sidley Austin to advise on a possible Chapter 11 bankruptcy filing.
Without admitting what it is planning a company spokesman told the Chicago Tribune: "It's an uncertain and difficult environment. We haven't made any decision. We're looking at all of our options."
But there are few options for a company that was acquired for $8.2bn (£5.6bn) last December by Chicago property billionaire Sam Zell, backed by a Tribune employee share ownership plan. The deal quickly ran into trouble as credit markets tightened and the slide in US newspapers' revenues gathered pace.
In an effort to reduce debt and meet obligations for large interest payments, Zell sold off the New York title Newsday. He has also instituted deep cuts to editorial staff across the group's titles. He was expected to sell the company's Chicago Cubs baseball team, but worsening markets have threatened such a move.
Last month, Tribune reported an operating loss of $124m (£84m) for the third quarter, a period when revenues fell 10%, operating cash flow plunged by 67% to $90m (£61m), and its interest bill amounted to $232m (£158m).
About six weeks ago, Tribune was said to be considering bids for two of its titles, the Orange County Register and the publisher of the San Diego Union-Tribune, but these came to nothing.
(Sources: Wall Street Journal/Chicago Tribune/Reuters/FT.com)
