Tribune Co. Looks To Divest Newspapers
After five years of bankruptcy and a seemingly endless legal battle, the Tribune Co. is hoping to sell some or all of its newspapers. It is meeting
with bankers to lay the groundwork, according to Bloomberg, citing sources familiar with these conversations.
Tribune Co. owns several big metro dailies, including the Chicago Tribune, Los Angeles Times and Baltimore Sun, as well as somewhat smaller newspapers including the Orlando Sentinel, South Florida Sentinel and the Hartford Courant. Tribune Co. could choose to sell some or all properties, or divest them separately over time.
If it choses the latter, per Bloomberg, the small pubs would probably go on sale first.
Tribune is currently scheduled to exit bankruptcy at the end of this year, marking the end of a disastrous chapter in the company’s history. That began with the buyout engineered by Sam Zell to take Tribune private as an employee-owned business in 2007. Struck at the height of the credit bubble, this deal loaded Tribune with around $8 billion in new debt, just as the bottom was about to fall out of the newspaper industry.
With print ad revenues tumbling, Zell was forced to take Tribune into Chapter 11 bankruptcy protection in December 2008, where it has since remained. Bondholders and creditors with claims predating the buyout have battled creditors, including the consortium of banks which funded the ill-fated deal in 2007.
At one point some
members of the former group claimed that the entire deal was insolvent from the beginning and therefore illegal as a “fraudulent vehicle.” The bankruptcy court agreed to defer these
claims, ruling that pre-buyout creditors can sue the lenders from 2007 to recover some of their earlier debts in separate legal actions.
Tribune has already secured permission from the FCC to transfer its TV and radio licenses to creditors, including JPMorgan Chase, Oaktree Capital Management and Angelo, Gordon.