THE TRIBUNE Company, a media powerhouse that owns newspapers across the US including such venerated titles as the Los Angeles Times and the Chicago Tribune, has filed for bankruptcy protection in a federal court in Delaware in the latest blow to America's devastated newspaper industry.
The bankruptcy filing for such a huge and influential group, which includes 12 newspapers and 23 TV stations, is being seen as a threat to traditional journalism in the US.
Many local newspapers, their profit margins hit by the migration of readers and advertising to the internet, have already been making cuts in their newsrooms.
The media analysts Fitch Ratings last week predicted that the outlook for newspapers across the US was so dire that many would begin to default on their debts and go bust. It warned that several cities would be left without any daily newspaper as soon as 2010.
Like many American news businesses, the Tribune Company has been suffering from sharply declining advertising revenues caused by recession and the shift to the internet. It is burdened by massive debts accrued last December when the property billionaire Samuel Zell gained control of the group and took it private in a deal costing more than $8bn (€6.2bn).
With debts approaching $13bn, the company was struggling to meet repayments, and had sought advice from a law firm and investment bank on seeking bankruptcy protection.
Since seizing power within the Chicago-based company, Mr Zell has become one of the most controversial figures in the tumultuous world of American newspapers.
Early on, he berated senior journalists at his most important titles that they were too focused on hard news. He then went on to slash pagination, vowing to increase the ratio of advertising to editorial until they were on an equal footing. John Carroll, former editor of the LA Times who resigned in 2005 over staff cuts inflicted before Mr Zell's arrival, said his old paper is now down to about half its former tally of journalists and it showed in a much thinner product.
"Newspapers are the core of regional journalism in America and that core is being diminished rapidly," he said.
While blogs had filled some of the deficit of public information, "most bloggers work with original material that has been dug up by the old media, and that source of material is now fading".
The turmoil in Chicago is echoed across the country. The Miami Herald has just been put on the market though no prospective buyers are thought to have expressed interest. The New York Times has lost 60 per cent of its share value and is experiencing cash flow problems. It has cut pagination, scrapped its sports magazine and plans to mortgage its new headquarters in Manhattan to generate $225m (€175m).
Bill Kovach, former Washington bureau chief of the New York Times who now works at the Project for Excellence in Journalism, said many of the country's most talented and experienced journalists had already lost their jobs. Many had found new employment with specialist publications serving elite readerships.
"What scares me most is that people with money can still afford to buy information from these publications, but the information available to the general public through newspapers is getting thinner every day. We've created a two-tier system that's tailor-made for an oligarchy, not a democracy in this country."
The bankruptcy filing does not include Tribunes Chicago Cubs Major League Baseball team, or iconic Wrigley Field, valued at about $1bn, where the Cubs play. Tribune had been trying to sell both, but big property deals have also been caught in the credit crunch. - ( Guardianservice)