http://www.bloomberg.com/apps/news?pid=20601103&sid=a77ye8yPz29U&refer=news

Tribune Files Bankruptcy One Year After Zell Bailout


By Steven Church and Dawn McCarty

(Corrects nature of debt in ninth paragraph.)

Dec. 8 (Bloomberg) -- Tribune Co., publisher of the Chicago Tribune and Los Angeles Times, sought bankruptcy court protection from creditors amid tumbling advertising less than a year after Sam Zell took it private.

The 161-year-old newspaper and broadcast company was laboring under $12.9 billion in debt, according to today’s Chapter 11 filing in U.S. Bankruptcy Court in Wilmington, Delaware. That load and the economic crisis led to the filing, Zell said in a statement.

“Factors beyond our control have created a perfect storm,” Chief Executive Officer Zell said.

Zell, 67, has cut jobs, sold assets including Long Island’s Newsday and put the Chicago Cubs baseball team up for sale to cope with the publisher’s debt and declining revenue. At the same time, U.S. newspaper industry ad sales plunged at accelerating rates, dropping 18 percent in the third quarter.

The Chicago Cubs and their Wrigley Field ballpark aren’t included in the bankruptcy. The sale process for the team and its timetable for completion are unchanged, the Cubs said in a statement, without providing further details.

Tribune, which put into bankruptcy more than 100 affiliates, listed assets of $7.6 billion in court documents.

Stay in Business

The publisher said it has enough cash to stay in business while reorganizing. As a hedge against further revenue declines, Tribune said it negotiated an agreement with Barclays Plc to continue to provide funds through an existing securitization facility and a letter of credit.

“We’re doing what’s right for the business to save the business,” Zell said today in an interview. “Clearly we have to address the cost of distribution, paper and issues of consolidation.”

JPMorgan Chase & Co. was listed as the biggest creditor, representing lenders owed $8.6 billion. JPMorgan is the biggest holder of that debt, with $1 billion, according to court documents.

The Chicago Tribune newspaper said in July it would eliminate about 80 newsroom jobs, or 14 percent of its editorial workforce. The Los Angeles Times, the fourth-largest U.S. newspaper by circulation, that month lowered the publication’s page count by 14 percent and fired 235 workers, including 135 in the newsroom. Another 75 newsroom positions were cut in October.

‘Grave Dancer’

When Zell, who has dubbed himself “The Grave Dancer” for his ability to resurrect wayward companies, closed the $8.3 billion purchase last December, he said he was “sick and tired of everybody talking about and commiserating about the end of newspapers.”

“They ain’t over,” Zell, who built his fortune buying real estate from distressed owners, said at the time. He was 68th on Forbes magazine’s 2008 list of the 400 richest Americans, with a fortune of $5 billion.

In September, Chicago-based Tribune sought to raise cash by selling a 10 percent stake in the employment Web site CareerBuilder.com to Gannett Co., the largest U.S. newspaper publisher, for $135 million. The purchase increased McLean, Virginia-based Gannett’s stake to 51 percent.

A 15 percent drop in ad sales industrywide during the first half forced Zell to accelerate what was intended to be a 2010 business plan and redesign of Tribune’s newspapers. In June, the Orlando Sentinel was the first publication to sport a new layout with shorter stories and more graphics.

Tribune, which also publishes the Baltimore Sun, the Sun Sentinel, the Hartford Courant, the Morning Call and the Daily Press, last month posted a third-quarter net loss of $121.6 million as newspaper ad revenue slumped 19 percent.

Tribune has a $300 million securitization facility tied to its trade receivables and used $218 million of it in the third quarter to pay other loans, according to a Nov. 10 statement.

Broadcasting Group

The company’s broadcasting group operates 23 television stations, the WGN America station on national cable, and Chicago’s WGN-AM radio station.

Tribune was founded in 1847. Its four-story headquarters burned to the ground during the Great Chicago Fire of 1871, and the newspaper resumed publishing two days later. The editor, Joseph Medill, led the city’s reconstruction after he was elected mayor, according to its Web site.

The case is In re Tribune Co., 08-13141, U.S. Bankruptcy Court, District of Delaware (Wilmington)

Print is dead.

I used to work for them until they sold my company last year.