Tribune Company files for Chapter 11 bankruptcy further sign of newspaper decline
In a press release today, the Tribune company -parent company of the Chicago Tribune- announced that it will voluntarily restructure its debt under Chapter 11 Bankruptcy. The Chicago Cubs and Wrigley Field, which the Tribune Co. has been trying to sell, are not part of the filing.
“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,” said Sam
Zell, chairman and CEO of Tribune. “Unfortunately, at the same time, factors beyond our control have
created a perfect storm.” Zell goes on to list the decline in revenue, the tough economy, and the credit crisis as factors that add to Tribune’s difficulty in supporting their debt.
The company feels that it has the cash to continue media operations during the resturcturing, including publishing its newspapers and running its television stations. In their bankruptcy filing for the District of Deleware Court, they seek approval of a number of First Day motions, including:
- Maintaining employee payroll and health benefits
- Fulfilling pre-filing obligations
- continuation of Tribune’s cash management system
- the ability to honor all customer programs.
For months, really years, the newspaper industry has suffered one setback after another. With a newspaper like the Chicago Tribune falling into bankruptcy, I’m sure newsrooms across the country are wondering if their paper is next.
Circulation at daily newspapers has been falling faster than expected. According to the Associated Press, combinded weekday circulation of 507 papers that reported circulation totals this year fell 4.6% from the same period last year. Daily circulation at 16 of the largest 25 newspapers fell 5 percent. Daily circulation at the Chicago Tribune was down 7.7% to 516,032.
I know very few people besides myself who get the Dallas Morning News delivered daily to their door. Just a few weeks ago, Belo -owners of the Dallas Morning News- went through another round of layoffs and buyouts. With competition from internet and changing patterns in media, there is no foreseeable floor to the newspaper drop off.
