The [Monday] Papers
LATE UPDATE: See the end of the column for an internal Sun-Times memo and a Tribune Co. press release about TribCo's bankruptcy filing.
* The sit-in by workers at Republic Windows and Doors is more than one of the first labor actions of the new economic era; it's already a national symbol of the economic times.
* In a further sign of overextended debt and an industry even dumber than automakers, the Tribune Co. is considering filing for bankruptcy protection. A wave of other media companies - including the Sun-Times Media Group - could follow.
* We have our own entrant in hedge fund madness.
* Our mayor is selling off our assets in order to balance his budget.
And somehow it seems fitting that it's almost certain we're going to send our second consecutive governor to jail even while our political power structure now occupies the White House. (The cherry on top is Todd Stroger addressing the Council of Governmental Ethics Laws this morning).
In other words, America is playing itself out right here in Chicago. In many ways, we have a front-row seat.
"And when the congressman decided not to move into the home, the developer, Krzysztof Karbowski, was there to buy it back.
"Gutierrez walked away with nearly $200,000."
The Sun-Times notes that "The reports could be part of a negotiating strategy with Wall Street lenders."
That's my suspicion, but I have nothing but instinct to base that on.
UPDATE 1:20 P.M.: TRIB FILES FOR BANKRUPTCY
By the way, I'm not linking to the S-T story because the paper's website has frozen my browser nearly every time I've gone to it for the last week. Is anyone else having this problem? I use Firefox on an iBookG4.
It just goes to show that you can sing along and still not really think about the words.
The Political Odds
Coming Tuesday: What Does Obama Smoke? The Inside Story.
How he holds his cigarette. How he blows out his smoke. How to smoke what he smokes how he smokes when he smokes.
Plus, an interactive map of an Obama smoking tour of Chicago. His favorite places to smoke!
"Looking back over the list, I think most moviegoers will have heard of only about 11, because distribution has reached such a dismal state. I wrote to a reader about Shotgun Stories, 'I don't know if it will play in your town.' She wrote back, 'How about my state?'
"This is a time when home video, Netflix and the good movie channels come to the rescue. My theory that you should see a movie on a big screen is sound, but utopian."
Both teams lose.
"Sarkozy meets Dalai Lama."
So I'm on the first tee with him . . .
"Don't shoplift for Christmas."
By then it'll be too late. Start now.
Angry Republic Workers
The Beachwood Tip Line: Not Safe For Work.
UPDATE/MEMO 6 P.M.: The publisher of the Sun-Times weighs in on the Tribune Co.'s bankruptcy filing.
December 8, 2008
Today the Tribune Co., which owns the Chicago Tribune and other print and broadcast outlets, announced that it filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. There may be some confusion as to what this means for them, and for us. I hope this note will answer some of your questions.
The Tribune Co. has voluntarily filed to reorganize its business. Such a filing offers a way for a company to work with its creditors and vendors while management continues to run day-to-day business operations - in other words, it can give a company facing a tough financial situation some breathing room. In a press release today, the Tribune Co. said it filed because of "a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support out debt."
This does not mean the company or its newspapers or broadcast outlets are going out of business. The purpose of a Chapter 11 filing typically is to allow a company to reorganize with the goal of emerging as a viable, profitable business. The Tribune Co. said today that there will be no interruption to its day-to-day operations, including publishing its newspapers. It also said that its Chicago Cubs franchise, including Wrigley Field, is not included in the Chapter 11 filing and that it will continue its previously announced efforts to sell the team.
We do not expect this filing to affect our distribution agreement with the Tribune. As you know, we signed a long-term contract with Chicago Tribune Co. last year to handle most of our Chicago Sun-Times and suburban newspaper delivery. Chicago Tribune Co. is bound by a legal contract to distribute most of our newspapers, and we expect that to continue without interruption.
Sun-Times Media Group, as you well know, has faced difficult financial challenges in recent years, including the current tough print advertising environment. We continue to work toward stabilizing our operations and managing our costs during what has emerged as the most financially challenging period in the news industry's history. We are committed to remaining the Chicago area's best source of news and information, and we must stay focused on that goal. We are launching our second major wave of cost reductions early next year as part of the expense reduction plan of $45 million to $55 million we announced to our shareholders in November. Our goal, as we have previously said, is to be cash flow neutral while preparing for a future economic rebound.
One of the great aspects about Chicago is that it has been served by two major dailies for years. We believe it is good for readers and advertisers for Chicago to continue to be a two-newspaper town, with our strong suburban titles delivering the local news and information our suburban customers want. The Chicago Tribune is a good competitor and we look forward to competing with them in the future.
UPDATE: 6:30 P.M.: Here is the Tribune Co.'s press release from earlier today.
TRIBUNE COMPANY PRESS RELEASE
Tribune Company to Voluntarily Restructure Debt Under Chapter 11
CHICAGO, Dec. 8, 2008 -- Tribune Company today announced that it is voluntarily restructuring its debt obligations under the protection of Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The company will continue to operate its media businesses during the restructuring, including publishing its newspapers and running its television stations and interactive properties without interruption, and has sufficient cash to do so.
The Chicago Cubs franchise, including Wrigley Field, is not included in the Chapter 11 filing. Efforts to monetize the Cubs and its related assets will continue.
"Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers," said Sam Zell, chairman and CEO of Tribune. "Unfortunately, at the same time, factors beyond our control have created a perfect storm - a precipitous decline in revenue and a tough economy coupled with credit crisis that makes it extremely difficult to support our debt.
"We believe that this restructuring will bring the level of our debt in line with current economic realities, and will take pressure off our operations, so we can continue to work toward our vision of creating a sustainable, cutting-edge media company that is valued by our readers, viewers, and advertisers, and plays a vital role in the communities we serve. This restructuring focuses on our debt, not on our operations."
The company filed today for Court approval of various, customary First-Day Motions, including: maintaining employee payroll and health benefits; the fulfillment of certain pre-filing obligations; the continuation of the Tribune's cash management system; the ability to honor all customer programs. The company anticipates its First-Day Motions will be approved in the next few days.
While the company has sufficient cash to continue operations, to supplement its cash availability in the event of even more significant declines in its operating results, the company has negotiated an agreement with Barclays to maintain post-filing its existing securitization facility. Barclays has also agreed to provide a letter of credit facility. The company expects to submit these agreements to the Court for approval as part of its First Day Motions.
Since going private last year, Tribune has re-paid approximately $1 billion of its senior credit facility.
For further information on Tribune Company's Chapter 11 filing, please visit Tribune.com or
Posted on December 8, 2008
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