Tribune Co. Exits Bankruptcy

By Chuck Sudo in News on Dec 31, 2012 7:00PM

Employees at Tribune Co. are looking forward to a stress-free 2013, at least compared to the past four years. The media conglomerate, whose assets include superstation WGN-TV and newspapers like the Chicago Tribune and Los Angeles Times, announced it exited from bankruptcy Monday. Tribune filed for bankruptcy protection in December 2008, 17 months after Sam Zell bought the company in a heavily leveraged $8 billion deal—Zell only put up $315 million of his own money and famously told Tribune Co. employees, “no matter what happens in this transaction, my lifestyle won’t change. Yours, on the other hand, could change dramatically if we get this right.” The deal saddled Tribune Co. with $13 billion in debt as technology changes led to a decline in print advertising revenue.

Tribune Co. named its new board of directors Sunday, with former Fox Network and Discovery Channel chief Peter Liguori expected to be named CEO. Current CEO Eddy Hartenstein has a seat on the restructured board. Other board members include Bruce Karsh, Ken Liang, Peter Murphy, Ross Levinsohn, Craig A. Jacobson. (Karsh is co-founder and president of Oaktree Capital Management LP, one of Tribune Co.’s new primary owners; Liang is Oaktree’s managing director.)

In the press release announcing the exit from bankruptcy, Hartenstein said

“Tribune will emerge from the bankruptcy process as a multi-media company with a great mix of profitable assets, strong brands in major markets and a much improved capital structure. The company’s greatest asset, however, is its employees who, individually and collectively, have remained focused on serving our viewers, readers, advertisers and communities with a single-minded sense of purpose and dedication. I want to thank all our employees for their talent and effort throughout this four-year process.”

But this could serve as the calm before another storm for a company that has had to deal with a shit storm since Zell’s transaction changed their lives dramatically, but not in the way he intended. It’s widely assumed that Tribune will begin selling off assets beginning with smaller newspaper properties and may separate the newspaper interests from the more profitable broadcasting assets. If that happens, major papers like the Chicago Tribune and Los Angeles Times could fetch a pretty penny from prospective buyers. News Corporation chairman Rupert Murdoch has long desired to add the Times to his empire and there was speculation in November he wouldn’t mind buying the Tribune, as well.

Tribune Co. exits bankruptcy with a $1.1 billion senior secured-term loan and a $300 million asset-based revolving line of credit. The loan will help the company pay off debts to creditors while the line of credit will help cover operations.