Friday, August 31, 2007


The Motley Fool remains skeptical that Tribune will go private under the Zell-engineered buyout of the company at $34 a share. Shares closed at a little more than 20% below that at $27.55 today.

The sharp decline in ad revenue, the glum real estate worries and eyeball migration to the Internet is impacting all the larger newspapers, but at Tribune "that resulted in a 5.9% revenue decline in July, with revenue at the publishing unit down 8.6%. Advertising revenue fell 10.3%. Classified ad revenue tumbled 18.2%, as real estate revenue dropped a steep 24%. It was another disappointing month from a company that recently reported lackluster earnings."

We were assured 10 days ago that the financing commitments are "tightly written" and include undefined material adverse effect clauses tied to industry performance. But Fool's David Lee Smith writes "The Zell group has arranged for the financing that would facilitate the buyout, although participating banks might pull that commitment if there is a material change in the company's circumstances -- which appears to be happening."

Guess we'll re-read the Merger Agreement.

We're all nervous about the possibility that the Deal will die. Of course, we hope it doesn't, because the alternative is even more distressing — because uh, well ... what isthe alternative?

Next week here, some thoughts on the shrinking iceberg and a few Guild ideas for transformative change.

Meantime, have a happy and safe(!) Labor Day weekend.

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