It's unlikely we'll get an up close look at the company's financials in the age of Zell, so the newly released 10-K will have to do. It shows that operating revenues at the LAT were just a shade under $1 billion in 2007, down from $1.1 billion a year earlier. It still remains a huge contributor to the Tribune chain, about 28 percent of total publishing revenue. (That’s why the notion of CEO Sam Zell selling it off seems far-fetched, at least for now.)
Tribune won't get any more specific on ad revenues at the Times, but company wide you can see a big drop in classified and national advertising last year. Classified took a real hit, falling to $927 million from $1.1 billion in 2006. Further down in the filing comes the part about having to service nearly $13 billion in debt. The company needs to shell out $650 million by December 4 and another $750 million in 2009. And what happens if Zell & Co. can't do it?
If our cash flows and capital resources are insufficient to fund our debt service obligations, we will likely face increased pressure to reduce or delay capital expenditures, dispose of assets or operations, further reduce the size of our workforce, seek additional capital or restructure or refinance our indebtedness. These actions could have a material adverse effect on our business, financial condition and results of operations. In addition, we cannot assure that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements, including the Credit Agreement and the Interim Credit Agreement.
If we cannot make scheduled payments or prepayments on our debt, we will be in default and, as a result, among other things, our debt holders could declare all outstanding principal and interest to be due and payable and we could be forced into bankruptcy or liquidation or required to substantially restructure or alter our business operations or debt obligations.
Here's the link to the 10-K. By the way, Tribune CEO Sam Zell will be receiving a token salary of 50 cents a year, though under the deal to go private he's entitled to buying a big chunk of the company. Right now, that doesn’t seem like much of a bargain.