tribune bankruptcy

Rip the story of Sam Zell's adventure in the newspaper business out of the typewriter and onto the spike. It's too late for a rewrite.

Reeling from the huge debt taken in the $8 billion buyout of Tribune, the crusty real estate titan has decided that his newspaper chain needs bankruptcy protection.

Tribune, whose newspapers include the Los Angeles Times, the Chicago Tribune, and the Baltimore Sun, listed $13 billion in debts in its filing with the United States bankruptcy court in Delaware. The company listed total assets of $7.6 billion.

The Tribune Company has been nearing a sale of the Chicago Cubs and Wrigley Field; they are not included in the filing.

"Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers," Zell said in a statement, because he certainly doesn't talk that way off the cuff. "Unfortunately, at the same time, factors beyond our control have created a perfect storm—a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt."

Zell, who snapped up Tribune and took it private in an employee buyout last December, had big plans for newspapers with puppies and big profits. The company recently hired Lazard and the Sidley Austin law firm to advise it on a bankruptcy.

Daniel Colarusso noted earlier that while it would be comforting to see Zell chow down on some humble pie with a bankruptcy filing, bankruptcy could be a plan to tear the empire down as fast as he can and recalibrate the businesses to fit the current environment and, more pointedly, the mission he's plotted. The cost of shutting down papers, however, could be a further drag on the company's cash position.

Since taking over Tribune, though, Zell often has been dismissive of newspaper owners and disdainful of journalists. In a recent interview with Joanne Lipman, the editor in chief of Condé Nast Portfolio, Zell labeled the newspaper business model "unequivocally...a failure," and challenged New York Times publisher Arthur Sulzberger, saying "If you want to be a charitable trust, be a charitable trust. If you don't want to be a charitable trust, then you've got to focus on producing a return for investors' capital, and it's just that simple."