Tribune Co. posts $4.53 bil loss in Q2
One day after $874 mil write-down by ScrippsNEW YORK -- Tribune Co. plunged to a $4.53 billion loss in the second quarter after taking a $3.84 billion charge to write down the book value of its newspaper brands.
The charge comes a day after E.W. Scripps Co. took a $874 million write-down as sharp declines in advertising revenue throughout the industry reduces the value of newspaper businesses.
Tribune, based in Chicago, earned $36.3 million in the year-ago second quarter. The company was taken private in an $8.2 billion buyout led by real estate mogul Sam Zell last December. It still reports results to comply with bondholder agreements because of its massive debt load.
Tribune's revenue fell 6% to $1.11 billion, as newspaper advertising revenue slumped 15%. Classified advertising led the decline with a 26% drop, as real estate and employment ads contracted.
The company's ad revenue from its Web sites fell 4%, also because of lower classified revenues.
Newspaper publishers have seen major drops in print ad revenue, but most have been growing their online ad revenue, although at paces not nearly fast enough to make up for losses from their print business.
Circulation revenue fell 2%, with the largest drops coming at its Chicago and Los Angeles papers.
Tribune said the noncash accounting charge does not affect its agreements with lenders.
The write-down affects goodwill, an accounting measure listed on a company's balance sheet to reflect the implied value of an intangible asset, such as a brand or intellectual property. Shares in newspaper companies have tumbled the past year, reducing the assumed value of their businesses.
Tribune said it repaid $807 million in principal in the quarter, using mostly the proceeds from the sale of Long Island daily Newsday to Cablevision Systems Corp. for more than $600 million.
Its next principal payment, of $593 million, is due in June. In order to raise cash, Zell plans to sell the Chicago Cubs baseball team and its Wrigley Field stadium, which could fetch more than $1 billion.
Most recently the company said it would consider ways to squeeze money from its real estate holdings. The company has been reported to be considering the sale of its iconic headquarters building in Chicago, Tribune Tower, and the building that houses the Los Angeles Times, Times Mirror Square.
The company has also made hundreds of layoffs at its papers and decreased the page count of print editions to trim costs.
Tribune's papers include its flagship Chicago Tribune, the Los Angeles Times and The (Baltimore) Sun.