The bad news just keeps coming for the old media, this time for major newspaper publisher the Tribune Company which may see its corporate bonds relegated even lower in the "junk bond" category.
Standard & Poor's Corp. put Tribune Co.'s already junk-rated debt under review for possible downgrade Friday, saying the Chicago-based media company's newspaper publishing group is likely to face further erosion of advertising revenue.
In placing Tribune's corporate credit rating on CreditWatch with negative implications, the debt-rating concern cited "our expectation that the rate of decline in advertising revenue at Tribune's newspaper publications may not improve appreciably and may worsen over the intermediate term."
Story Continues Below Ad ↓In December, immediately after Tribune was taken private through a heavily leveraged $8.2 billion buyout led by real estate billionaire Sam Zell, S&P lowered the company's debt by one notch, to B from B-plus.
The New York company said Friday that it had factored into the December rating "our expectation that newspaper advertising and circulation revenue at Tribune would decline in 2008, but at lower rates than ... 2007."
But now, S&P said, the newspaper sector has been demonstrating "weakening in operating trends." For Tribune, whose newspapers holdings include the Chicago Tribune and the Los Angeles Times, that could mean a bigger-than-expected dip in profitability, with the potential for a slimmer cushion between Tribune's operating performance and the requirements spelled out in the covenants that govern its bank facility.
A Tribune spokesman declined to comment on S&P's action.
If the same simple-minded approach to Iraq news were applied to this story, the conclusion is inevitable: the Tribune Company should withdraw from the newspaper publishing business.
Of course, the media would never make such an argument because they understand their business well and are extremely committed to staying in business despite hardships because they think they are engaged in a worthy cause. Unfortunately for the public, left-leaning reporters seem incapable of realizing that this line of thought is a legitimate viewpoint when it comes to Iraq. The non-stop bias when things weren't going well there and news blackout now that things are going much better is a sad testament to this fact.
—Matthew Sheffield is the creator of NewsBusters and its Executive Editor.
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Comments Policy
First thing, any realization of what is going on
February 9, 2008 - 14:30 ET by FastEdis beyond their comprehension. The old media cannot transition to the new media way of thinking, as then you need to recognize that there are at least 2 sides to most stories, especially in the political arena. Another old thinking aspect is to NOT try something new. Other than the technology of publishing, (handset, hot, cold, electronic type), the old media insistist that they "know" best, hauling out their old agenda driven playbook, and trying to make it fit within the new presentation matrix.
For the last couple of years, the old media has been losing ad revnue and readers, readers who have been getting a more balanced (if they want it) view of the world, and are seeing the bias (finally) of what the papers have been presenting. This has had the effect of seeing the bias in the broadcast media as well. (if one does it, then maybe the other does it also effect)
The old media then is at the point that they should try the experiment of going BACK to straight reporting. Eliminate the bias (pipe dream) and see what happens - there isn't much else to lose. Try it, you might get some money back!
There is no sense in being stupid, if you can't prove it! - my dad V
→ NYT Junk Bonds
February 9, 2008 - 14:35 ET by Cool ArrowAnd if the avian flu hits, birdcage lining income will fall off sharply. A veritable death knell to the Old Yellow Lady.
♣ a seal
It's a new game.
February 9, 2008 - 15:28 ET by RackieHold on there Matt. Sit down and take a deep breath. Yes, the OldMedia is having trouble as are a lot of businesses. Even governments are scrambling to figure out how to survive in the circumstances they find themselves in today. Unfortunately, the smart boys and girls that built these mighty empires are helpless in the face of the forces that challenge them now. They don't know what they don't know. It will happen to you too. Times they are a changing, Matt. Let's give the new guy at TribCo. a chance.
Well, the Key words are Advertising Revenue
February 9, 2008 - 17:08 ET by JayTeeOne can speculate that it is only the Editorial pages that keep people from buying the LA Times or the Chic Tribune. . . But it's the Ad revenue that creates the BIG numbers, not the subscription rates, and not Ann Coulter's Column. Heck, I get Ann's weekly column delivered to my E-mail......I don't need no Stinking Tribune.
If you wanna sell a Car, you used to put an Ad in the Local Newspaper....same with Selling a House....same with Renting ......same with Advertising a JOB, or Looking for a JOB ...... Now it's MONSTER.COM, AUTOTRADER, etc..etc..and more ETC..... and while you still see Full Page ads in the Newspapaers for Automobiles and Real Estate foldout sections, Todays market also has Web sites for Auto dealers, Real Estate Web sites with Virtual Tours, ETc..etc...
The Old Media is Print. I think the Editorials guys are along for the Ride in the Newspaper Business, but if they put up their OWN LA TIMES, NY TIMES Web sites...they don't get the Market Replacement value of Lost Revenue trying to compete with the New Media.
The people Writing the newsprint Editorials need to find an audience..ON THE WEB !! because their Day jobs are going away.
I think they could pull it out
February 9, 2008 - 17:11 ET by Matthew SheffieldBut it's a difficult thing to do and tough unless you're willing to discard old thinking.
And Libs are not known for THINKING outside the Box
February 9, 2008 - 17:37 ET by JayTeeIf you havn't learned Lower Taxes means Higher Revenue, better Economy......etc....etc...Even Obama knows that Conservatives (Reagan) were creating new Ideas.
IF you produce a Financial Model/Proposal for the Investment Banker to lend BIG money, you better have a WEB based Advertisement Strategy and a WEB site. The Ad in the NYT just won't cover the target audience anymore.
Schadenfreude
February 9, 2008 - 15:36 ET by kch50428Could not happen to a better bunch.
Say not the last word out loud
February 9, 2008 - 19:06 ET by VonuImagine what their credit rating would be IF we were in a recession
Other problems...
February 9, 2008 - 20:45 ET by heldmywDead tree news sources have one inherent problem that they cannot solve.
Their news isn't new.
By the time it hits the driveway, every story in there has been updated, examined commented on and followed up three or four times. Television and the internet stomp print into irrelevance.
They simply cannot compete, and I have no use for information that isn't timely. Sorry. I won't waste my time and money.
"Tribune Company's Credit
February 9, 2008 - 21:29 ET by Chris Norman"Tribune Company's Credit Rating Dropping Below Junk Bond?"
"Junk" - somehow, it seems appropriate...
Miami Herald and Sun-Sentinel
February 10, 2008 - 06:26 ET by P.J. GladnickBoth the Miami Herald and the Ft. Lauderdale Sun-Sentinel here in South Florida are also experiencing plunging circulations and revenues. And the steps they are taking to counter this trend are quite laughable. For example, the Miami Herald redesigned itself several years ago. The end result was to lose the distinctive Herald look in favor of a bland type of layout. Then Sun-Sentinel responded to the challenge of the Web by coming out with the most boring online editorial blog imaginable---the Slant. Also laughable are it's animated editorial cartoon graphics which look like they were designed by some kid in the second grade.