I'm CEO of Newspeg.com, a social news-sharing platform. I've spent 20 years at the intersection of traditional and digital journalism. I've helped to invent ways to read and interact with the news and advertising on computer screens and iPads, and before that, I wrote news stories on typewriters and six-ply paper. I co-founded WashingtonPost.com and hyperlocal pioneers Backfence.com and GrowthSpur; served as editor of Philly.com; taught media entrepreneurship at the University of Maryland; and have done product-development and strategy consulting for all sorts of media and Internet companies. You can read more about me here.
The Death Eaters, Knock, Knock, Knocking on Tribune's Door
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 grapplingwithsimilarlyoverextended, 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.