Tribune Co posts $4.5b quarterly loss

by Dan Leahul, Brand Republic 14-Aug-08, 13:55

LONDON - Media firm Tribune Company reported a $4.5bn second quarter loss yesterday, due to the write-down of the value of many of their newspaper titles, which include the Chicago Tribune and the Los Angeles Times.

The 2008 loss from continuing operations was due to a $3.8bn write-down of the value of Tribune Co's newspapers, nearly all resulting from its acquisition of Times Mirror in 2000.

A $705m loss was recorded on discounted operations from the sale of the New York daily Newsday, sold to Cablevision Systems Corp earlier this year.

Amid dwindling readership and waning ad revenue the company is on the hook to make debt payments to avoid defaulting with lenders.

Tribune Co is set to pay $593m in debt in June 2009, which will follow a payment of $807m to cover debt due in December 2008. Tribune Co incurred billions of dollars of loans when chief executive Sam Zell took over the company last year. The current debt total is $12.5bn.

Cash flow fell 2% in 2008 to $221m and total revenue fell 6% to $1.1b. Revenue from publishing advertising fell by 15%, and classified ad revenue dropped by 26%. Online ad revenue also fell by 4% in 2008.

Media analyst Ken Doctor told Reuters: "The operating costs are not in [Zell's] favour. They're not so draconian as to remove the positive of the Cablevision sale, so it's a holding pattern."

In a press release Zell said: "Our publishing results are, for the most part, in line with industry trends, which remain consistent with what we reported in the first quarter."

However, Zell noted that Tribune Co had launched dozens of programs and products this year that have the "potential to make a meaningful impact on our future".

Meanwhile, the company has been reducing expenses and cutting staff in many of its newspaper titles. Reuters reports that the company also plans to sell some of its property to pay off debts, including Wrigley Field in Chicago, home of the Chicago Cubs baseball team.