December 10, 2008
WASHINGTON, DC – Media conglomerate Tribune Co. filed for bankruptcy protection on December 8. The privately held owner of the Los Angeles Times, Chicago Tribune, and other media properties has reported $13 billion in debt. According to the Associated Press, most of the Tribune Co.’s debt comes from the complex transaction in which the company was taken private by CEO Sam Zell in 2007.
Consumers Union made the following statement today in response to the Tribune’s filing:
“Tough economic times are particularly hard on media companies that depend on advertising. Tribune is especially vulnerable because of the heavy debt stemming from its leveraged buyout last year. Clearly, media consolidation is not a solution to the economic woes of journalism. It’s a much deeper problem. This is a painful restructuring of the journalism business model. Newspapers and TV are increasingly going to have to develop profitable ways to distribute their content online, and their focus needs to be on finding ways for quality journalism to be appropriately compensated.
“Media owners have argued that consolidation and conglomeration make good economic sense, and they result in a more vibrant media marketplace. But this assertion is challenged by reality. Consolidation brings sharp reductions in staff, resulting in a reduction of the amount and quality of local news, while failing to yield economic benefits. Newspaper circulation is down, but readership is not. Both the Wall Street Journal and Philadelphia Inquirer claim to have an increase in readership due to online distribution. This reinforces the point that the biggest challenge facing traditional media is developing profitable ways to distribute their content online.”