Well today, hell arrived and Tribune filed for Chapter 11.
- Media conglomerate Tribune Co. has filed for bankrutpcy protection, pressured by high debts. Tribune, the privately held publisher of the Chicago Tribune and Los Angeles Times, in recent days hired Lazard Ltd. as its financial adviser and a legal counsel for a possible trip through bankruptcy court, the Wall Street Journal reported, citing people familiar with the matter.
- The Wall Street Journal said Tribune has been on wobbly footing since last December, when real-estate mogul Sam Zell led a debt-backed deal to take the company private. It said that the company's cash flow may not be enough to cover nearly $1 billion in interest payments due this year, and Tribune owes a $512 million debt payment in June.
- One of Tribune's most pressing concerns is that the company is likely to be in violation of debt terms that limit borrowings at the end of the year to nine times its adjusted profits, the paper said.
If you are intellectually curious about this type of thing, I'd read the post from Nov 3rd, and then what opened my eyes to this game a few years ago, also in BusinessWeek [BusinessWeek - April 10 2006: Where's the Beef?] about how the game is played, in this regard specific to Burger King. That's one of my favorite stories period in terms of learning what exactly is going on out there in the highest reaches of the fiefdom. While the serfs... err sheep are oblivious to it all. It really is eye opening and shows you how the greater good (existing companies that were just fine until these "titans" came onboard) is sacrificed so a few can extract a ton of money out of these situations. This is part and parcel with our economic system - risk the many for the riches of the few. If the company goes bust, who cares - many of the peon class (workers) lose their job, but those who played the game win as they extracted their fees (management consulting fees and others) for doing the deal. If a lot of people lose their jobs and homes - that's ok - the big money made their scratch. Even Chapter 11 bankruptcy is not really losing anymore.
Anyhow, it really is amazing how the "titans" have gamed the system - heads we win, tails we win - not much different than the corporate executives compensation system. Cramerica - for the corporation, by the corporation. Just a sign of the times - as the tide rolls out, the dirty underwear is showing its skid marks all over America. Expect a lot of these in 2009. (no worries - the government will fix it)