Los Angeles Times and Chicago Tribune controlling investor Sam Zell may be unable to stop the loss of advertising revenue leading him and other U.S. newspaper publishers closer to default on billions of dollars in debt, Bloomberg reports.
Zell’s Tribune Co., even with attempts to shore up the company’s cash by selling assets and debt, could face default by the end of the year, Standard & Poor’s analyst Emile Courtney said on June 13 in New York. “In the absence of additional asset sales, we think that it’s a possibility as early as December,” Courtney said in a telephone interview.
Tribune may not be able to generate enough cash to meet the terms of loans that financed its Dec. 20 leveraged buyout, Courtney said. Gimme Credit LLC on June 6 called the debt situation “deteriorating.” It recommends selling Tribune bonds.
Industry print advertising sales suffered the biggest drop in at least 37 years in the first quarter, the eighth straight decline, as reported by the Newspaper Association of America.
