Does Tribune bankruptcy signal the death of print
Sam Zell took the Tribune Co. private last year in an multi billion dollar leveraged buyout. Today, they announced they would file for bankruptcy reorganization.
I'm originally from Chicago and the bankruptcy of The Tribune, a Chicago institution was shocking to me. The company owns major newspapers in Chicago and Los Angeles (The LA Times) and in several other cities. It also owns 23 television stations including WGN (by the way, the call letters stand for World's Greatest Newspaper). And they own the lovable losers, the Chicago Cubs and Wrigley Field (which are not part of the filing).
As to Sam Zell, he is known as the "grave dancer". He made his fortune in real estate by buying low and selling high. During the savings and loan crisis he bought when everyone was selling. He had the foresight to sell his firm, Equity Office Properties, a few years ago at the top of the market.
And then he took that money and bought into a struggling industry.
We're living in a digital age when most people get their news online. Take a look at how thin the newspaper has gotten. The LA Times eliminated their weekly real estate section due to lack of interest by real estate agents who like many others around the country including myself no longer choose to advertise homes for sale in print when the buyers are all online. With declining advertising revenues, The Post and Courier, Charleston's daily newspaper, has recently trimmed the content of its weekly real estate section.
The struggling economy has to be hurting newspaper advertising. With all the talk about very slow sales in the automotive business and the potential government loans (bailout) to GM, Ford and Chrysler, you have to assume that car dealers have cut their advertising budgets.
The purchase of the Tribune Co. apparently didn't work out for Sam Zell. Though I'm sure he'll be back.
But I wonder if this doesn't signal the death of print.
And this just in, The NY Times plans to borrow over $200 million against their new headquarters in Manhattan to raise cash.