Hell for Zell: The Bankruptcy of Tribune Company
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Case Details:
Case Code : BSTR317
Case Length : 19 Pages
Period : 2000-2009
Pub Date : 2009
Teaching Note :Not Available
Organization : Tribune Company
Industry : Newspapers
Countries : USA
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction Contd...
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Tribune, a 161-year-old publicly traded company, owned several newspapers, TV stations, and a radio station in the US. It started out publishing one newspaper the
'Chicago Tribune' and over the years, purchased several other newspapers to expand its portfolio. It was also one of the early entrants in the US radio and TV industries.
In the early 2000s, the company was the third largest publisher of newspapers and one of the biggest media conglomerates in the US. But the growth of the Internet adversely affected the company's newspaper and TV businesses. The company was faced with falling subscriptions and ad revenues in its newspaper business, as both readers and advertisers moved in increasing numbers to online media.
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The situation was almost similar in the company's TV business, where it found it difficult to sell ad spots, because of the increasing reliance of advertisers on online advertising.
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An ill thought-out acquisition of another newspaper company in the early 2000s added to the company's problems. During the period 2000-06, the company's financial situation worsened and the stock price also fell drastically. In late 2006, pressured by shareholders, the management of the company put the company up for sale. In April 2007, Zell, a billionaire who had made his fortune in the real estate business, proposed a deal which was accepted by the company.
In December 2007, Zell became the Chairman and CEO of the company and invested about US$ 315 million in it... |
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