Media giant Tribune Co., saddled with billions in debt since it became a privately-held company last year, filed for Chapter 11 bankruptcy protection in a Delaware court this afternoon.
The move will allow Tribune to stay in business while it seeks better terms from its creditors.
The Chicago-based company owns a coast-to-coast empire with television stations and newspapers in most of the nation’s largest cities. Its holdings include the Los Angeles Times; cable television superstation WGN in Chicago; the Baltimore Sun; and WDCW-50 in Washington, the CW affiliate. The company also owns the Chicago Cubs.
Tribune assumed some $13 billion in debt when real estate mogul Sam Zell engineered an employee-owned transition to private ownership one year ago this month. Hopes were high among employees that the company could be re-engineered to be a news company of the 21st century.
But sharply dropping advertising revenue, a decline that has hit almost all of the nation’s newspapers in recent years, have put the company in danger of being unable to meet its debt covenants, according to a source close to the company who spoke on the condition of anonymity because Tribune is privately held.