There can be no joy whatsoever in the news that Tribune Co. is circling the bankruptcy lawyers and advisers in preparation for a Chapter 11 filing that could come as early as this week, according to The Wall Street Journal.
Years ago, I covered large failing companies for the Chicago Tribune (quel coincidence!), so I know that these lumbering, beleaguered edifices sometimes take longer to topple than anyone would think. (Just ask General Motors.) So the Journal's prediction of the timing of a bankruptcy filing may be a tad premature. But I also know that once the Death Eaters come for a company, it's hard to avoid the inevitable.
It's not really a surprise, and no matter how much schadenfreude you want to direct at Sam Zell, the large degree to which he inherited a mess, was in over his head from the start and then played his hand badly was greatly multiplied by the downturn in the advertising economy over the past few weeks. That brought in water over the side of Tribune's Titanic far faster than Sam and his minions could hope to bail.
Much more importantly, you have to feel for Tribune's loyal and long-suffering employees, who have been through a nightmare that has now probably wiped out their past year's worth of company-sponsored retirement savings (pre-Zell retirement money is protected, I hear). The bankruptcy reorganization process, no matter how orderly, will probably lead to even more drastic cuts–not to mention general fear and loathing–at Tribune and its papers and broadcast stations in the months to come.
Meanwhile, that sick economy isn't getting any better–lousy Christmas sales are going to snuff a few more retailers after the holiday, further slowing the advertising market that Tribune and other newspaper companies are clinging to for survival.
In other words, schadenfreudesters, don't cackle too much at Zell's misfortune. Wipe those sneering smiles from your faces. Similar calamity can and likely will befall many of your journalistic employers, too, in the months to come. There are several newspaper companies already grappling with similarly overextended, debt-laden balance sheets; just about everybody else in the industry is at least feeling the pinch from the advertising recession and the wrenching structural change that preceded it. And that pinch, as I said, is only deepening.
So the Death Eaters won't stop at Tribune Tower. They'll be visiting other newspapers (and magazines) as well in the coming months. Zell and Tribune were just the largest, perhaps most tragicomic example of the fragility of today's newspaper business. But they aren't the only ones. Not by a long shot.
What a lousy day for those of us who love newspapers and newspaper work. What a crummy, painful long goodbye this is. And our future? We go from "reporter" to "content provider." Or, worse, "blogger." Gawd, how I hate that word -- "blogger." It's a combo of "blah" and "grrr."
Mike Royko, we miss you.
Posted by: JD Mullane | December 08, 2008 at 01:59 PM