Tribune Co. posts quarterly loss

Tribune Co., parent of the Los Angeles Times and KTLA Channel 5, announced a $78.8-million fourth-quarter loss due to falling advertising revenue, higher interest expenses and a number of one-time charges arising from the $8.2-billion buyout completed in December.

Chicago billionaire Sam Zell, who became Tribune chief executive after leading the buyout along with an employee stock ownership plan, said the company had “begun a strategic review of certain Tribune assets” to help decide whether to sell properties and put the money into core operations or use it to pare down debt. He did not identify any of the assets being reviewed.

The fourth-quarter loss compared with year-earlier income of $233 million from continuing operations. For the full year of 2007, Tribune reported net income from continuing operations of $55 million, compared with $661 million in 2006.

“Despite the continued difficult operating environment and weakness in print revenue, we see significant opportunity within Tribune Company,” Zell said in the announcement. “In our first 75 days, we’ve made a series of key leadership changes, have launched a number of programs and projects to drive new revenue, and have initiated a fundamental shift in culture.”

The buyout left Tribune with more than $13 billion in debt at a time when the economy appeared to be sliding into recession. The weak economy and continuing competition from Internet rivals for advertising dollars and readers’ attention have sharply cut the company’s revenue and cash flow, especially among its newspapers.

The ratings of Tribune’s bonds have been cut and the bonds have declined precipitously in value, reflecting investors’ view that there is a rising risk of default.

“I have been trying to instill a sense of urgency among you all,” Zell said in a “dear partners” e-mail memo to Tribune employees today. He exhorted them to “get together with your colleagues, and fight to improve our performance.”

thomas.mulligan@latimes.com