Syndicators Put Price on Tribune Bankruptcy

Feb 8, 2009  •  Post A Comment

The collateral damage from Tribune’s bankruptcy filing in December is rippling through the syndication industry, with Disney-ABC Domestic Television taking a $60 million writedown on deals with the TV station owner and News Corp. setting aside $10 million to deal with the problem.
On top of those charges, Time Warner, which owns Warner Bros. Domestic Television Distribution, set aside $30 million to account for bankruptcies from several companies it does business with. Tribune gets shows including “Two and a Half Men” from Warner Bros.
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Tribune’s bankruptcy occurred at a crucial time in syndication, as distributors struggle to preserve the economic model that supports first-run programming. Cash-strapped stations, fighting advertising declines, have less money to pay for shows with higher production values.
The recession could amplify that dynamic, creating a vicious cycle of stations being able to afford only lower-quality shows that get lower ratings, which in turn generate less advertising revenue to pay for better first-run fare.
The full dimensions of Tribune’s bankruptcy are not yet clear. A News Corp. official said Tribune has been making its payments on outstanding debts.
While the bankruptcies of Tribune and other media companies can deliver earnings hits to studios, the disruptions aren’t big enough to seriously harm the parent companies.
Time Warner Chief Financial Officer John Martin said he isn’t expecting other bankruptcies to hinder his company’s ability to perform.
“Across the board, [the losses] are not material enough to impact the overall financial status of the major conglomerates,” said Jamie Rizzo, senior director with analysis firm Fitch Ratings.
Mr. Rizzo said he expects Tribune stations to successfully emerge from bankruptcy. Looming trouble at other station groups could, however, bring more pain to syndicators, he said. If stations and other media in local markets start going dark, it will get dicey for distributors.
“That’s an apocalyptic scenario where local markets can no longer support five or six local stations—that’s the worst situation,” Mr. Rizzo said.


  1. 2.5 Men on FOX stations?!…..

  2. Yes Mike, in syndication the show may well run on Fox stations, or any other stations. In its first-run primetime airing, it is a CBS network show that airs on CBS stations, but in syndication it can be sold to whichever station in a market pays the most.

  3. Family Guy on fox O&O???????????????????????????????

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