Saturday, April 25, 2009

Tribune Co. Asks Bankruptcy Court To Extend Exclusivity Deadline and More News

From Tribune staff, news services

Tribune Co. has asked a U.S. Bankruptcy Court in Delaware to extend its exclusive right to file a reorganization plan until Aug. 4 and to give the Chicago-based media giant until Oct. 5 to win approval for its plan from creditors.

This is the first request by the owner of the Chicago Tribune to extend exclusivity, which gives Chairman and Chief Executive Sam Zell's management team first dibs on drafting a plan to restructure operations. Once exclusivity expires, creditors are free to present competing plans.

The court is expected to approve Tribune Co.'s request at an April 24 hearing. Creditors didn't file an objection to Tribune Co.'s motion by the Friday afternoon deadline set by the court.

The company's exclusivity was set to expire April 6, but has been extended by law until the court acts on its motion to reset that deadline.

Tribune Co., which filed for bankruptcy protection Dec. 8, originally had until June 5 to win over creditors.

Connecticut Attorney General Questions Sam Zell

Richard Blumenthal, Attorney General of Connecticut, claims Tribune Company’s plan to merge the newsrooms of WTIC-TV, WTXX-TV and The Hartford Courant violates the FCC’s temporary waiver for the crossownership combination. The AG has written to Tribune CEO Sam Zell demanding answers to a series of questions.

Tribune says it is in full compliance with the law.“On its face, this arrangement appears to violate the Federal Communications Commission ban on a company owning a TV station and newspaper in the same market,” Blumenthal wrote. He conceded that Tribune has a temporary waiver from the FCC while it considers whether to change the rule. “I am concerned that allowing these entities to full merge into one news and information operation goes well beyond what the FCC intended when it granted Tribune a two-year limited waiver,” he wrote. Blumenthal’s letter can be downloaded as a pdf on this page.

Tribune on Friday sent this statement to RBR/TVBR:“Tribune’s decision to operate the Hartford Courant and its two television stations from one location in Hartford was designed to improve our ability to serve our readers, viewers and advertisers and the communities in which they live and work. Permitting WTIC and WTXX to draw on the rich newsgathering resources of the nation’s oldest newspaper makes them a better and more competitive news organization.

Giving the Courant more direct access to the television stations’ video journalism makes the newspaper more relevant to its readers, and improves the 24/7 coverage the Courant and the stations provide over the internet . The Courant and the stations will continue to decide independently what news to present and how to present it to their print, broadcast and internet audiences. These three business units have taken advantage of one another’s newsgathering resources for several years. This next step is in full compliance with the law, including the waivers granted by the FCC. We know our readers and viewers in Connecticut have many other choices to turn to for news, information and entertainment.

In an economic environment where newspapers and broadcasters must innovate and become more efficient to survive, measures such as this are essential to preserve the quality journalism that the Courant and our television stations are known for. We appreciate Attorney General Blumenthal’s concerns, but we believe they are misplaced.”

Tribune Co. Subpoenaed Over Employee Stock Plan

The Labor Department subpoenaed the Tribune Company over its employee stock plan, which was crucial to the purchase of the company by the billionaire Sam Zell.

The company disclosed the subpoena, issued in March, in a bankruptcy court filing and said it had handed over the documents. A Tribune spokesman was not available for comment.

The agency’s questions relate to the Employee Retirement Income Security Act, a law intended to protect people in employee retirement plans. The stock plan was an important piece of Mr. Zell’s plan to acquire the company in an $8.2 billion deal that involved $13 billion in debt. He intended for the stock plan to become the largest owner of the company, which would let it avoid corporate taxes. That, in turn, was supposed to help a company turnaround.

Sam Zell on deal to take Tribune Co. private: 'I made a mistake'
By Phil Rosenthal Tribune reporter

Tribune Co. Chairman and Chief Executive Sam Zell told Bloomberg Television that his heavily leveraged 2007 privatization of the Chicago Tribune parent was "a mistake" in that he did not anticipate the steep decline in the newspaper business."

By definition, if you bought something and it's now worth a great deal less, you made a mistake, and I'm more than willing to say I made a mistake," Zell said Wednesday. "I was too optimistic in terms of the newspaper's ability to preserve its position."

Zell, who took Tribune Co. private in a leveraged $8.2 billion deal, reiterated that his goal is to emerge from Chapter 11 bankruptcy proceedings begun in December to manage its $13 billion in debt with its assets intact. But the billionaire investor also said the company is looking at "all options." "It's very obvious that the newspaper model in its current form does not work, and the sooner we all acknowledge that the better," Zell said. "Whether it be home delivery, whether it be giving content away for free—these are critical issues.

"We are seriously looking at everything because in effect the future of the newspaper industry is at risk today," he said, when pressed on the possibility of cutting back on delivery and print in favor of a greater role for digital publication.

A Tribune Co. spokesman declined to comment.

Zell said a near-term merger of some sort is highly unlikely. "I don't think that there's a long list of people who want to buy newspaper companies today, and for sure it's not likely to be the case until we reach some kind of a new bottom as to what the newspaper's role is going to be in our society going forward," he said.

Asked how he hopes his management of Tribune Co. will be viewed in two years, Zell said, "I think they're going to recognize that by filing for bankruptcy in December and being the first one, we also were able to stop the bleeding and preserve a great company.

"Tribune Co. properties include the Chicago Tribune and Los Angeles Times, as well as Chicago magazine, WGN-Ch. 9, WPIX-Ch11, and WGN-AM

Chicago Tribune To Cut 90 More From Newsroom

The Chicago Tribune, with its parent company facing a federal investigation of its ownership structure, is planning what could be the deepest job cuts yet in its newsroom.

Employees said Monday they expect around 90 people to be laid off in coming weeks. They said internal announcements of the cutbacks in a staff of more than 400 people are expected around April 24.

It would be the biggest of a series of bites that Tribune owner Sam Zell has taken out of the editorial department at his company's flagship. Zell's 2007 buyout of the company left it with $13 billion in debt that has forced it into bankruptcy.

After Zell completed what he called the "deal from hell" in late 2007, the Chicago Tribune had more than 600 people on its news staff. If another 90 are subtracted, the staff will be about half the size it was before the real estate mogul took over.

Zell also has presided over cuts at other Tribune-owned papers, especially the Los Angeles Times and the Baltimore Sun, amid advertising declines felt across the media industry.

Chicago Tribune spokeswoman Kathleen Mersman would not confirm layoff figures. "We are in the midst of reorganizing the newsroom to position ourselves for success in the future," she said.

Word of new layoffs comes on the heels of a Tribune Co. disclosure that the Labor Department is investigating its employee stock ownership plan. Zell crafted the plan as a way to save on federal income taxes.

In a bankruptcy court filing, Tribune said the Labor Department on March 2 subpoenaed "an extensive range of documents." It also said the company complied with the subpoena on March 31. A Labor official would not discuss the matter. The federal agency reviews corporate pension funds for misappropriation. Tribune corporate spokesman Gary Weitman told the AP, "We view this as a routine inquiry."

NPR Cutbacks Include 13 Layoffs
By Paul Farhi
Washington Post Staff Writer Friday, April 24, 2009

National Public Radio said yesterday it will lay off 13 employees and furlough all of its employees for five days over the next five months in the latest round of belt-tightening by the Washington-based organization.

The cuts are part of a series of measures that will help NPR close a projected $8 million budget gap during its current fiscal year, and $15 million over the next two years.

In addition to the furloughs, employees also will not be paid for three holidays (Memorial Day, Independence Day and Labor Day) this year, and three more when its new fiscal year begins on Oct. 1.

Like many news-media organizations, NPR has been grappling with reduced revenue; in December, as its fiscal crisis deepened, it laid off 64 employees, or 7 percent of the staff, and eliminated two daily radio programs, "Day to Day" and "News and Notes." It was NPR's first layoff in 25 years.

As part of its latest cutback, the nonprofit broadcaster will also eliminate contributions to employee retirement accounts through the end of the current fiscal year, and will cut the contributions by half next year. It will also eliminate merit raises next year.

The latest job cuts were in the information technology, legal services and communications departments and won't affect programming, NPR said.

NPR has been hammered by declining revenue from its four major sources of funding: corporate sponsors, fees from more than 800 public radio stations that carry its programs, donations from foundations and income from an internal endowment.

The reductions will put NPR on track to meet its budgets, but NPR spokeswoman Dana Davis Rehm could not say whether the worst was over. "I don't think anyone can predict what's going to happen," she said. "We think this is a very prudent and reasonable plan."

IRONY: 'Recession Diaries' Blogger Not Allowed To Blog About Being Laid Off

The Chicago Tribune gave Lou Carlozo a tough assignment: to cover his own finances as he and his family weathered the recession.

Carlozo lost his job yesterday, as did 52 others. And, he writes at True/Slant, he wasn't allowed to blog about being laid off.

"I wanted to post a final blog Wednesday to readers explaining that I had lost my job, a victim of the very recession I covered. I posted this without management's approval. I then informed management. Management took it down."

"The Recession Diaries" doesn't load any more; pulling up the URL brings up a blank page.

Carlozo writes: "That's not my loss, it is the reader's loss. As many emails attest, I was becoming a friend, a confidant, a trusted voice to thousands of hurting people. And in one swipe yesterday, the Chicago Tribune took that away from them without any explanation. It explains in no small part why the Tribune is losing readers like a trauma victim loses blood and internal organs."

It looks like Carlozo will be pouring more energy into True/Slant now. We wish him the best of luck.

UPDATE: He's posted the final 'Recession Diaries' entry, the one the Tribune wanted to suppress. Check it out.

Posted by Rachel Kaufman

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