Tribune Co. Files for Chapter 11 Protection
Highly leveraged Tribune Co. announced Monday that it is seeking protection under Chapter 11 while the media empire voluntarily restructures its $12 billion in debt obligations, among which is a $512 million principal payment due in June.
In the announcement Monday, the company said the Chicago Cubs Major League Baseball franchise and Wrigley Field, which it had hoped to sell in 2008 until the credit crunch hit, are not included in the filing.
Tribune also said it has the cash to continue to operate its 23 television, eight print and interactive properties without interruption and intends to do so.
“Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers,” Tribune Chairman-CEO Sam Zell said in the announcement. “Unfortunately, at the same time, 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.”
Mr. Zell said Tribune believes “this restructuring will bring the level of our debt in line with current economic realities, and will take pressure off our operations, so we can continue to work toward our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers and advertisers, and plays a vital role in the communities we serve. This restructuring focuses on our debt, not on our operations.”
Since going private last year, after being bought by Mr. Zell, Tribune has repaid approximately $1 billion of its senior credit facility.