Tribune says it will have cash to meet ‘08 debt payments
Tribune Co. executives said Thursday that thanks to new credit arrangements and the pending $650-million sale of Newsday, the debt-burdened media company would have enough cash to meet its interest and principal payments this year and otherwise would be in compliance with its loan agreements.
Tribune, parent of the Los Angeles Times, KTLA-TV Channel 5, the Chicago Tribune and other properties, is struggling with annual loan payments of about $1 billion during a severe advertising recession and a shift of readers to the Internet. Chief Executive Sam Zell said in a conference call with analysts that although first-quarter advertising revenue from newspaper publishing was down 15% from a year ago, the situation had improved since March.
Randy Michaels, chief operating officer, said the company planned to impose further deep cuts in newsprint costs and newspaper staffing and could do so without major adverse effects on content.
At The Times, for example, 82 news pages per week can be eliminated, giving the paper a 50-50 ratio of news to advertising, Michaels said. Across Tribune’s nine newspapers, he said, some 500 news pages per week could be cut, for an unspecified but “substantial” savings.
Smaller papers with more graphics, maps and lists will be rolled out companywide beginning this month at the Orlando Sentinel, with the rest of the newspapers following by the end of September, Michaels said.
He added that Tribune had begun measuring the productivity of its journalists in terms of the number of pages of news that each reporter generates annually. Reporters at The Times on average generate 51 pages a year, compared with more than 300 at the Hartford Courant or Baltimore Sun, Michaels said. And there were wide productivity variations among reporters at the same newspaper.
“You can eliminate a fair number of people while eliminating not very much content,” Michaels said, though he added that staffing decisions would be left up to local publishers.
Times Editor Russ Stanton, in an e-mail to the newsroom staff following the Tribune conference, said that measuring output in terms of print pages, while useful, failed to account for video and Internet-only content such as blog postings produced by reporters. He also noted that Times content was reproduced in newspapers and on websites across the country.
Zell told analysts that potential bidders for the Chicago Cubs should receive detailed financial data within a week and would have 30 days after that to submit bids. The team, its Wrigley Field ballpark and related properties are collectively expected to sell for $1 billion or more, which would go toward reducing Tribune’s debt.