The IRS and Department of Labor are investigating Tribune. A private law firm may do so as well. Some think the company is more likely to be splintered than salvaged. So rumors that the Grave Dancer is on the wrong side of the grave persist.
RBR/TVBR reported that creditors want Zell out of the picture, but that the matter is out of their hands until a bankruptcy court puts it there. However, the New York Post says an insider familiar with the situation says Zell may give them what they want anyway, and simply walk away from his option to buy a 40% stake in the company for $500M.
With Zell out of the picture, speculation is rampant that the company will be sliced into parts and sold off piecemeal.
Meanwhile, law firm Zuckerman Spaeder has been hired by junior investors who want to get in line ahead of senior investors for compensation when what will probably be fire sales do start to bring some cash into the company in exchange for ravaging its portfolio, arguing that the senior firms have already banked fees related to the ESOP deal and also contributed to Tribune’s current insolvency.
RBR/TVBR observation: Many would argue that one of the biggest problems with the broadcasting industry today comes from companies with names like Zell on the door of the corner office. We too would make that argument.
It would also appear that the great experiment, putting some of pre-merger-mania radio’s best minds in charge of television stations and newspapers isn’t working out so well, although in this economic climate it could also be argued that Randy Michaels and colleagues weren’t given a fighting chance.
All we know for sure is that this is a horrible time to be selling media properties, and if that’s where Tribune is headed no matter what, somebody is going to get some sweetheart deals on some legendary properties.