Monday, December 08, 2008

GCI partner Tribune said girding for bankruptcy

In fresh evidence of the industry's downward spiral, multiple reports say Tribune Co. -- publisher of the Los Angeles Times, Chicago Tribune and 10 other dailies plus TV stations -- is preparing to seek bankruptcy court protection.

Gannett and Tribune are partners in CareerBuilder, the big employment classifieds website; GCI owns 50.8% and Tribune is No. 2 at 30.8% (the rest is owned by McClatchy and Microsoft.) Gannett and Tribune also are partners in Metromix, a chain of youth-focused entertainment pages on GCI websites.

Chicago Tribune now has a story, and so does The New York Times' DealBook blog. They follow a Wall Street Journal story (paid subscription may be required to access).

Tribune's reported step toward court protection comes on a week when newspaper publishers -- including CEO Craig Dubow -- are making high-profile presentations to powerful media stock analysts on Wall Street.

What's it mean for Gannett?
This is only the seventh post to include the words "bankruptcy" since I launched Gannett Blog in September 2007. I think we're going to see more ahead. And that's why now is an excellent time to review the company's last earnings statement, for the third quarter, with particular attention to measures of debt.

For that, I gladly step aside to make way for the finance gals and guys on this blog to show us how it's done -- and explain it to the rest of us. Please post your replies in the comments section, below. E-mail confidentially via gannettblog[at]gmail[dot-com]; see Tipsters Anonymous Policy in the green sidebar, upper right.

[Image: today's Chicago Tribune, Newseum]


  1. I'll buy the Cubs with my pension payout.

  2. Uh oh ... The dominoes being to fall.

  3. When the bankruptcy sale begins, which Tribune property will GCI buy? GCI could turn the L.A. Times into a real money-maker.

  4. The Tribune Company will sell Metromix, CareerBuilder and the LA Times to Gannett for sure. The bankruptcy threat is merely a time delay so they can liquidate those assets.

  5. If it comes to selling off Trib properties, I hope to god Gannett -- and Dean Singleton -- don't go after the L.A. Times. You know what both are capable of. I fled the Arizona Republic in 2000 shortly after Gannett bought it. Fled to the LAT. Didn't want to work for Gannett then, don't want to work for it now. Same for Dean Singleton.

  6. Tribune!! AAAAAH - don't go bankrupt!! Where oh where will I get my Metromix fix for Naughty Secretary photo galleries???

  7. if gannett buys the chicago tribune, all the printing operations of the wisconsin papers could be moved to chicago !

  8. I'd almost welcome this if it kills Metromix. Almost.

  9. McClatchy just put Miami-Herald up for sale.

    Let the bidding begin for Gannett, oh and then the chop shop.

  10. 11:15 p.m.: What the hell are you smoking? Wisconsin has three sites printing 10 newspapers now!

  11. You know, having a bigger chunk of CareerBuilder at a bargain price wouldn't be the worst thing in the world.

    It's not going to do us any good this year, but towards the end of 2009, when the recession eases? It could become the engine that supports the print side for once.

  12. If Gannett bids on any of the Trib properties, it's throwing good money after bad.

    You're all missing the real news here. It's not what assets GCI could pick up, it's that this could be a preview of what's to come for Gannett.

    Before the heads get on here talking about GCI's cash position and that the Trib had much more debt, etc., do not think for one second that bankruptcy isn't a viable option.

    But, what this may lead to is consolidation, as we've seen in every other sector. It may be Gannett's only way to avoid the same fate.

  13. Call me naive when I ask this question.

    If online revenue (CareerBuilder, Metromix, etc.) is "saving" Gannett, why did it seemingly not do the same for the partner company?

  14. 10:31 AM - I think you hit your head right on the nail.

    The online portion without print has little value in itself. Without the print component, online makes Gannett simply another fish in the vast cyber ocean.

    Take Google for instance. Now there is an online powerhouse. The word "Google" has become part of the american (and world) vernacular. The same can not be said about Gannett, outside of the scope of this blog.

  15. I love Google.
    But Google News would fold if it didn't have all the print media Web sites to mine for news every second of the day. It doesn't generate any fresh copy, just updates existing news stories and blogs.
    If print news outlets folds, we'll be stuck reading news that was published in the Guardian.

  16. Eyeballs don't translate into revenue the same way they do in the print world - that's the problem. Monetizing online has and continues to be the big problem. And with print moguls running the ship and trying to manage online as such, that's a recipe for disaster.

  17. The Tribune Co. *IS* different. It was leveraged up to its eyeballs from the day it went private. While Gannett has a chunk of debt, it is not leveraged to anywhere near the extent of the Tribune or several other chains. *THIS* is the big difference between Gannett and other chains from a business viability standpoint.

    It's almost impossible to sell a newspaper company (or individual newspaper) now. There's almost no way to accurately valuate them any more, for one thing.

    The reality is that it's at least possible that some Tribune properties will be sold for the simple assumption of debt.

    I for one wouldn't want the L.A. Times -- it's in an incredibly difficult market position. Some other Trib properties, particularly the Tribune itself, look a lot more appealing.

  18. "But Google News would fold if it didn't have all the print media Web sites to mine for news every second of the day."

    cnn isn't print media. they do fine. I think google will survive with or without print media. it would be arrogant to think otherwise. If print media goes away, people will find something else to fill the void... gannett isn't too big to fail, newspapers are a luxury nowadays.

  19. "Eyeballs don't translate into revenue the same way they do in the print world - that's the problem. Monetizing online has and continues to be the big problem. And with print moguls running the ship and trying to manage online as such, that's a recipe for disaster."


    If you want to make money online you have to have a very low overhead. Gannett is too bloated to really make money online. look at the google employee numbers vs. the Gannett employee numbers... Google has like 1/3rd as many people as GCI. Also google has a small fraction of what gannett has in terms of poperty to maintain, pay taxes on, operating costs, etc.

    gannett could make money online, and it could become a competitor in the world of online media outlets, but in order to get close to even consider thinking about that, gannett would have to almost liquidate all properties, consolidate all the online departments, and keep just enough reporters and sales people to cover all of the territory.

    until then, gannett's online presence will remain a simple accessory to their print product unfortunately.

  20. 10:31 AM - That's because Online is not "saving" crap. All online revenues add up to about 20% of the gross revenue of Gannett. Also, keep in mind that most of the Online revenue is "cross over" or bundled with print. No Print = No Online.

    However, Online will tell you otherwise.


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