What will be the fate of both the Orlando and Sun-Sentinel? From AP–
NEW YORK – Media conglomerate Tribune Co., smothered by $13 billion in debt and weak prospects for generating cash through advertising, on Monday became the first major newspaper publisher to seek bankruptcy protection since the Internet began siphoning readers from traditional outlets.
Although Tribune’s next major principal payment on the debt, of $593 million, isn’t due until June, Tribune has been in danger of missing lender-imposed financial targets at year’s end. Those targets are based on the level of Tribune’s debt relative to its cash flow, and become harder to meet as revenue declines, even if the debt itself doesn’t increase.
Other newspaper companies have also struggled with their debts, but many have successfully negotiated with lenders to ease their targets in exchange for higher interest rates.
I am not going to rub my hands in glee at the downfall of Tribune. For I know a few people who work for one of that empire’s publications. As a blogger, I use Sun-Sentinel aritcles for my posts more often than any news source with the exception of AP and The Palm Beach Post. If the Sentinel folds, where do I find news coverage of the happenings in Broward County 20-25 miles to my south?
Bob at The Daily Pulp, who called this the quickest bankruptcy since worldcom, writes–
We all saw this coming, just not this fast. Understand that this doesn’t mean the company is necessarily going out of business (though that is a distinct possibility). It means it will get a chance to stave off creditors and restructure its debt. But with that, usually, comes very deep cuts and asset sales. The Sentinel (and the Herald, for that matter) are profitable newspapers, just not as profitable as they used to be.
More cuts won’t improve the product, as can be seen on a daily basis with the Palm Beach Post. If a South Florida newspaper folds, or we see a merger between two of the three dailies sometime in the next five years I won’t be surprised.