Magazine article Editor & Publisher

'Newsday' Sale Not Enough to Plug Tribune Debt

Magazine article Editor & Publisher

'Newsday' Sale Not Enough to Plug Tribune Debt

Article excerpt

Tribune Co.'s $650 million sale of Newsday Monday gives the Chicago media giant some breathing room on its $12.8 billion in debt -- but not much more.

Thanks largely to the $8.2 billion in debt it took on to go private in the deal engineered by real estate mogul Sam Zell, Tribune faces a debt service bill of $1 billion this year. And that doesn't include a $650 million payment due in December.

"Does it help Tribune? Yes. Is it the last asset sale? No," said David Novosel, a Chicago-based analyst for Gimme Credit, an independent research firm on corporate bonds. "So while its good news from Tribune's perspective, it certainly doesn't solve all their problems."

Novosel said he was pleasantly surprised by the price, which was $50 million more than he expected. But in a telephone interview, he repeated a theme he has sounded in notes to investors: Tribune debt is at distressed levels, and continuing assets sales are a must.

"I would say it is not on the verge of bankruptcy," Novosel said, "because I think the assets sales will get them over the hump near-term. …

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