Tribune Co, owner of the Los Angeles Times and Chicago Tribune, other newspapers and the Chicago Cubs and Wrigley Field, has hired financial advisers ahead of a possible filing for bankruptcy-court protection, reports said.
The Chicago Tribune reported on Sunday that its parent had hired investment bank Lazard Ltd and law firm Sidley Austin as it considers its financial options.
“It’s an uncertain and difficult environment,” Tribune Co spokesman Gary Weitman said in a Chicago Tribune story published on the newspaper’s Web site on Sunday night. “We haven’t made any decision. We’re looking at all of our options.”
Weitman did not immediately respond to requests for comment. Lazard spokeswoman Judi Mackey said the firm declined to comment on the reports.
The Wall Street Journal, quoting people familiar with the matter, reported a bankruptcy filing could come as early as this week. It said Tribune Co’s cash flow may not be enough to cover nearly US$1 billion in interest payments that are due this year.
Tribune was taken private last December in a US$8.2 billion buyout led by real estate mogul Sam Zell.
Last month, Tribune said its debt load increased to US$11.8 billion at the end of the third quarter, up from US$9.4 billion a year ago. It posted a loss of US$121.6 million for the third quarter as newspaper advertising revenue dwindled.
The company had originally expected its newspaper and broadcast revenue to cover interest and principal on its debt.
But plummeting advertising revenue at most Tribune newspapers this year has forced Tribune to cut costs, including staff, and to sell assets to raise money.
The company had deadline of yesterday on US$70 million in unsecured debt it took on before the Zell deal, the Chicago Tribune reported.
It can either draw on existing credit to pay the debt or negotiate new terms with its creditors, the newspaper reported.
Standard & Poor’s Ratings Services downgraded Tribune’s debt further into junk territory last month, saying the credit crunch could delay the sale of assets — and limit the amount that the company could get for them — including the Cubs, Wrigley Field and its 25 percent interest in Comcast SportsNet Chicago.
Chicago Cubs chairman Crane Kennedy said Friday that the Cubs are going over bids for the team and he expects the baseball franchise to be sold by spring training.