RBR-TVBR After 20 months dealing with the U.S. Bankruptcy Court for the District of Delaware, Friday 8/27 was an important day for Tribune's campaign to control its own destiny. (They chose not to file a new plan.)Just ahead of its monthly operating report (which will include an amended plan to exit bankruptcy) for July with the Court for set to be released 8/27, Tribune announced 8/26 that it now has about $1.6 billion in cash.
The filing may be Tribune management’s last – and best -- chance to broker a friendly compromise with the company’s creditors: JPMorgan Chase and two hedge funds, Angelo, Gordon & Co. and Oaktree Capital Management.
The filing could convince the court that their plan to move forward is the right one, and head off the creditors’ reported exploratory conversations with prospective candidates who could operate Tribune once it emerges from bankruptcy protection. Former Disney CEO Michael Eisner is in discussions that could lead to his return to the media biz as chairman of Tribune.
Recently, we reported JPMorgan and Angelo, Gordon & Co. withdrew support for Tribune’s reorg plan. Nontheless, Tribune execs are still talking to the creditors laying out their vision of what would be a fair settlement. They are hoping the filing will get enough creditors on board to get a plan confirmed by the court.
A note sent 8/26 to Tribune employees from CEO Randy Michaels and COO Gerry Spector reassures them of the company’s strength in these tough times: “There’s been a lot of media speculation lately regarding our Chapter 11 process—and the temptation is to let it distract us from the things that matter most: focusing on our business and serving our customers and communities. Try not to pay attention to the outside noise. Our employees are our greatest asset, and our financial performance so far this year has been remarkable—and that is what counts. Consolidated operating cash flow is up 44% through July, and we’ve substantially increased operating cash flow in both publishing and broadcasting.
This afternoon we will announce some financial highlights through the first seven months of 2010 in the attached press release. These results are further testimony to your talent, your creativity, and your hard work. Keep it up. We have a lot more to do…but we’ve established some solid momentum.”
Other financial highlights for the seven-month period ending August 1, 2010: Operating cash flow increased substantially in both publishing and broadcasting compared to the same period in 2009. The company generated approximately $100 million more in consolidated operating cash flow compared to the same period last year, and in the month of July alone, generated $18 million more in consolidated operating cash flow compared to July 2009. Consolidated operating cash flow increased 44% and consolidated operating cash flow margin increased to 18% from 12% for the first seven months of 2009.
“We continue transforming Tribune from a collection of media businesses to a single media company,” said Michaels. “Working together enables us to continue leveraging the development of scalable, common systems throughout the company, which is the primary factor behind our ability to reduce expenses. Consolidated cash operating expenses were down 7 percent through July, 2010.”
More from the company's YTD financials, released 8/26:The company’s cable network, WGN America, is more profitable than it has ever been, thanks to new programming, a 25% increase in ratings among all adults, and strong upfront advertising sales. Next month the network will add “Entourage,” “Curb Your Enthusiasm,” “The New Adventures of Old Christine,” and “How I Met Your Mother” to its programming line-up.
Tribune's television group has added more than 130 hours per week of local news programming since 2008, and later this fall will broadcast a total of eight NFL football games in select markets.
On the publishing side, the company has launched “breaking news” centers in each of its markets, introduced new niche print products and expects to have slowed the trend of circulation declines at its newspapers when it reports results to the Audit Bureau of Circulations in September.
“Our employees have done an incredible job,” said Michaels. “They are talented, innovative, and dedicated to serving our readers, viewers, advertisers and communities. We have built some momentum and accomplished a lot, but there is much more to do.”
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