What killed Tribune?

Resemblant of both the faltering economy and the precipitous decline of print media's once dominant position in news reporting, the Tribune Company has announced that it is filing for Chapter 11.

The news sprang up quickly and came to many as a pity, though not as a shock. Tribune borrowed $13 billion to go private. Unfortunately though, as Douglas McIntyre writes, banks are facing a growing loss of capital and are incapable, even if willing, to fund risky business.

How could a well-established media company like Tribune allow this to happen? There are multiple perspectives on the decline of print media, and at this point I'm inclined to believe they all carry a good amount of weight.

McIntyre's comments about the lack of liquidity and willingness to shell out money for uncertain gains in the private sector is a great one to make in light of America's current economic situation.

With my background in journalism, I take the position that Tribune, like so many other newspapers, tried to weather the storm as a normal company would- by cutting costs, and that is its downfall. The problem there of course is that slashing jobs means cutting the heart out of the business. Newspapers need reporters, plain and simple. The Los Angeles Times has been unable to hide its shrinking staff; misreporting and constant errors reflect a belt tightened to the point of strangulation, and the result has been a dive in readership.

Of course, there's also just bad luck and timing. This point goes back to McIntyre's in that this is probably the worst economic climate to send your company private in, regardless of the volatility in the stock market.

Tribune's owner since last December, Real-estate investor Sam Zell, said it most succinctly in this quote from MarketWatch: "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."