CHICAGO (AP) — More than four years after crushing debt and plunging advertising sales forced it to file for Chapter 11 bankruptcy protection, Tribune Co. has emerged with a new television-focused board and over $1 billion in new financing.
Led by such creative and technology heavyweights as Ross Levinsohn, the former interim CEO of Yahoo Inc., and Peter Murphy, former strategic officer of The Walt Disney Co., the board's roster suggests a focus on the company's TV assets rather than newspapers, which haven't managed to turn around declines in readership and advertising. Peter Liguori, a former TV executive at Discovery Communications Inc. and News Corp.'s Fox, is expected to be named CEO in the next several weeks.
The exit closes a dark period for Tribune, which was founded in 1847 with a hand-cranked print run of 400 copies of the Chicago Tribune. It founded the WGN broadcasting brand with a radio station in 1924 and a TV station in 1948. The call letters stood for "World's Greatest Newspaper." Tribune first went public in 1983 valued at $206 million — one of the biggest IPOs of its day — and expanded over the years into a media giant through acquisitions of TV stations such as KTLA in Los Angeles and newspapers such as the Los Angeles Times, The Baltimore Sun and Newsday. It also owns a stake in the Food Network and online job site CareerBuilder.com.
In 2006, pressured by its long-sagging stock price and dissident shareholders, Tribune put itself on the block. Sam Zell, a Chicago real estate mogul who made his fortune in commercial real estate but had little experience with the media industry, took the company private in a leveraged buyout that valued Tribune at about $8.2 billion.
But the deal ballooned Tribune's debt load from $5 billion to more than $13 billion just as the Great Recession hit. Advertising revenue plummeted across the industry, which was also struggling with steep declines in circulation as readers found free access to news, sports and entertainment online. Less than a year after Zell closed the deal, Tribune filed for Chapter 11 protection.
The company's restructuring dragged on for years due to fraud allegations and dueling lawsuits between creditors. In the end, the parties agreed to a plan that included payouts of nearly $3 billion in cash to creditors and turned ownership over to senior lenders including Oaktree Capital Management, Angelo Gordon and Co., and JPMorgan Chase and Co.