Chicago and New York Old Media In Deep Financial Trouble
Tribune was toast the moment Sam Zell loaded it up with $13 billion of debt. That it is now considering bankruptcy, therefore, comes as little surprise. (Read this early prognosis from Alan Mutter if you doubt that sane industry observers saw this coming).
More startling over the past year has been the collapse of the New York Times (NYT). The New York Times Company has a $400 million debt payment due in five months, and management has not yet explained how it plans to meet this. The company is nearly out of cash, its operations are now burning cash, and its attempts to sell assets have, so far, been unsuccessful.
As we noted a month ago, the New York Times Company now has a negative current net worth: Over the next year, it will be required to shell out more than twice as much cash as it has on hand. The New York Times' long-term assets and liabilitities, meanwhile, are roughly equal: The value of the Red Sox stake and corporate headquarters approximately offset the company's long-term debt, pension plan, and other liabilities (at least according to their carrying values.)