Newspaper insiders for the most part weren’t all that surprised to see the Tribune Company file for Chapter 11 bankruptcy protection yesterday. The Trib has been in trouble for some time, and it hasn’t been helped by high profile fights of the past two years by owner Sam Zell, who purchased the company in April of 2007, which saw him take the company private. Since then his fights with the leadership of the Los Angeles Times have achieved near legendary status.
The problem is that bankruptcy isn’t a complete answer for the Tribune Company. Perhaps they’d do best to do as Sam Zell suggested just a short time ago when the mortgage crisis was at the top of the news:
“…this country needs a cleansing. We need to clean out all those people who never should have been in houses in the first place.”
Perhaps indeed the newspaper industry also needs a cleansing, and all those who should never have owned newspapers should be cleaned out. For example, Sam Zell.
Snark aside, just wiping the debt away won’t fix things for the Tribune Company. Alan D. Mutter at Reflections of a Newsosaur puts it well:
…But there has been no evidence over the last year that Zell or the shock jocks he dispatched to run the company have any ideas about how to arrest the long-running decline in newspaper advertising that – significantly – predated their ownership. The decline has accelerated this year in the worst recession since the 1930s.
Fixing the Tribune would be a tall order for any management team, but it already has proven to be well beyond the capabilities of the incumbents. Far from effectively using Tribune’s brands, market power and talented staff, the Zellistas have terrorized the company through successive layoffs and pointless vindictive tirades.
More distressing is the news that The New York Times Company has mortgaged its downtown property to provide much needed liquidity. We can take comfort in the fact that they’ve at least played things conservatively and now have cash to help weather the storm. Still, the cynic will question what type of planning it is that lead them to be forced to refinance so soon after selling off the Times Square property.
One suspects the truth will be found in the middle. The companies that have cash reserves can probably stave off disaster long enough to reinvent themselves. Those that fiddled while the industry burned, or were bought by those who sought to profit by selling off the pieces of the empire will likely find a place on the old media funeral pyre.
Other dire news for newspapers:
- Miami Herald is put up for sale by McClatchy
- NYT stock has dropped 55 % this year alone
- Gannett is cutting 10% of its workforce company wide
- Cox killed its Washington Bureau
I could go on. Things were bad for newspapers even before the recession. Its time to reinvent, retrench and reinvigorate, and a good portion of the current herd of lumbering beasts just won’t be capable of making the transition.