Thursday, September 27, 2007

Rate cut may favor Zell Deal

The Federal Reserve's 0.5% rate cut could be good news for the Deal's financing given the current limited credit climate. “The real question is whether the [Tribune] company’s cash flow is sufficiently affected to interfere with their being able to borrow,” Silver Spring-based media analyst John Morton said. “And the company has said they don’t anticipate that it will.”

Deal failure, however, would not upset The [Baltimore] Sun’s Newspaper Guild members, said Angie Kuhl, commercial vice chair of the union unit at the paper. Kuhl said that most members prefer local control — a possibility if Tribune divests The Sun. “It’s a big, unwieldy company — and hierarchical,” Kuhl said of Tribune. “That’s one of the frustrations of employees here.”

A busted deal also would not upset Ted Venetoulis, spokesman for a local group interested in buying The Sun. “[Now] we just have to wait for Zell to make a judgment,” he said, “and not bother him until he gets his arms around [the merger].”
(end of post)

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