Chicago Cubs find a buyer originally appeared on BloggingStocks on Fri, 23 Jan 2009 13:25:00 EST. Please see our terms for use of feeds.

Mark Cuban to Sam Zell: Sell me the Chicago Cubs at a discount originally appeared on BloggingStocks on Wed, 07 Jan 2009 09:09:00 EST. Please see our terms for use of feeds.

This post is part of our feature on Money Losers of 2008. See all 20.

When Sam Zell acquired the Tribune Co. in April 2007 for $8.2 billion in cash, pundits speculated about whether the "grave dancer" who had made billions in distressed real estate had bitten off more than he could chew. The overwhelming evidence indicates that is exactly what happened.

Even by the very low standards of the newspaper industry, Tribune was a disaster. Many of its papers were big-city dailies that have been hit especially hard from the move by advertisers online. The Los Angles Times, the flagship paper of the old Times Mirror chain, experienced both the biggest declines in circulation and in newsroom employees, according to a New York Times report from October. During the third quarter, operating expenses in the publishing business rose 6% to $640 million while operating revenue plunged 13% to $654 million. It's no surprise that there have been boatloads of layoffs in the division.

The broadcasting business has also been hurt by soft advertising at the company's 23 television stations. Mark Cuban's efforts to buy the company's Chicago Cubs have reportedly been held up because the the loud-mouth billionaire's problems with the SEC. The fact that many businesses are finding it impossible to get a line of credit does not help either.

Continue reading Money losers of 2008: Sam Zell's year from hell

Money losers of 2008: Sam Zell's year from hell originally appeared on BloggingStocks on Fri, 26 Dec 2008 16:30:00 EST. Please see our terms for use of feeds.

Some big companies have already gone bankrupt. The Tribune Company is the most recent. But, one of the trend's earliest victims was Lehman.

At the economy goes deeper into Hell with each passing month, bankruptcy attorneys will become the richest lawyers in America.

According to MarketWatch, "A sour economy and tight credit market clearly are just the right ingredients to bring about a wave of bankruptcies." There is no shame in it. Airlines have been doing it for decades.

Chapter 11 is actually a nifty way to stiff debt holders and employees. If a company can find an investor who wants to gamble they can get most of a bankrupt firm's assets in court, a debtor-in-possession, a judge can void loans and employment contracts in the name of keeping a troubled firm alive.

All of that may be good for the operations who seek court protection, but the trend would do further damage to the economy. Many of the firms who financed companies that are in trouble are banks. More losses for them will lead to more write-downs. And, that leads to more shareholder dilution and more government aid. On the employment side, cutting big numbers of people increases joblessness. That, in turn, ratchets down consumer spending and pushes up government costs to support those without work.

Otherwise, Chapter 11 is a great idea for companies in peril.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Bankruptcy becomes exit of choice originally appeared on BloggingStocks on Tue, 09 Dec 2008 11:11:00 EST. Please see our terms for use of feeds.

A lot of America's newspaper companies have been in trouble. Advertising has been down as much as 15% this year and that has gotten worse in the last few months.

Almost all of the chains have had to cut staff and some properties have been put on the block to help the companies pay down debt. But, none of the really big operators in the business have had to go bankrupt.

That may change this week. The Tribune Company, which went private about a year ago, may not be able to make its debt service payments. According to The Wall Street Journal, "Tribune's latest actions underscore the deepening distress enveloping Tribune and other newspaper publishers."

The headline about the Tribune's trouble may be about the newspaper industry, but the story is just as much about the private equity/LBO trend that hit record levels less than two years ago. The Tribune Company was able to borrow almost $12 billion in an industry which was already beginning its downturn. That says a remarkable amount about the level of risk that bankers were willing to take to get fees.

Now, the firms that put the debt into the Tribune transaction are faced with getting pennies on the dollar. Newspapers may be a bad business, but it looks like private equity is turning out to be even worse.

Douglas A. McIntyre is an editor at 247wallst.com

Will The Tribune Company go bankrupt? originally appeared on BloggingStocks on Mon, 08 Dec 2008 08:50:00 EST. Please see our terms for use of feeds.

Sam Zell is looking to unload the Chicago Cubs baseball franchise that came with his ill-timed $8.2 billion acquisition of Tribune Media Co., and the most aggressive suitor appears to be dot-com billionaire Mark Cuban. The New York Times reports that he offered $1.3 billion for the the team, Wrigley Field, and the team's stake in Comcast SportsNet Chicago.

But of course, Cuban, who has accumulated $1.7 million in fines during his tenure as owner of the Dallas Mavericks, is not without his critics, to say the least. He's too arrogant, too brash, and not gentlemanly enough, they say. He had trouble cracking into the old boy's network of the NBA, and Major League Baseball is said to be even more reluctant to change.

But if Cuban is the high bidder -- and the league will let him in -- it'll be a great day for the Cubs and for baseball. The team hasn't won a World Series since 1908 but, given Cuban's deep pockets and superhuman competitive drive, the Cubs would likely get the extra boost they need to finally win one. Plus, Cubs and Cuban have the same first three letters, so it's pretty much meant to be.

Baseball has dealt with a lot of scandal lately involving performance-enhancing drugs, and it's about time we added a passionate renegade to the current regime of old bureaucrats. And yes, I'm talking to you Ted Lerner.

Let Mark Cuban buy the Chicago Cubs! originally appeared on BloggingStocks on Sun, 03 Aug 2008 15:10:00 EST. Please see our terms for use of feeds.

Tribune, formerly a public newspaper and broadcast company, lost the publisher of its largest newspaper, the LA Times, and the editor of its flagship, the Chicago Tribune. New controlling shareholder Sam Zell is in trouble, burdened by buyout debt he may not be able to pay.

Most analysts saw another modest drop in newspaper ad revenue this year. It has been much worse than that. At some companies in the industry, ad sales are off nearly 15%. An analyst recently dropped his price target on The New York Times Company (NYSE: NYT) to $8 and said the firm would have to cut its dividend. The stock currently trades at $13.21.

The two public companies which are at most risk for not making it another year are Gatehouse (NYSE: GHS) and McClatchy (NYSE: MNI). Both took on big debt loads buying newspaper properties. Both are seeing operating income chopped by falling sales. Either could hit debt service problems which could force them to sell properties of file for Chapter11.

Gatehouse dropped as low as $1.11 in the last few days. Its 52-week high is $19. McClatchy is down to $4.93 from a 52-week high of $28.65. Gatehouse is the most troubled with a high dividend and $1.3 billion in long-term debt.

Newspapers companies have gone from being in a tight spot to being candidates for liquidation. They are a short-seller's dream.

Douglas A. McIntyre is an editor at 24/7 Wall St.

As Tribune loses executive, some newpapers move toward Chapter 11 originally appeared on BloggingStocks on Tue, 15 Jul 2008 09:55:00 EST. Please see our terms for use of feeds.

The Tribune is not a public company anymore, but CEO Sam Zell says enough about his plans that it might as well be.

According to The New York Times, Zell "announced a set of deep cuts, saying that shrinking revenue left them no choice." One of the things that means is fewer pages devoted to news as newsprint use is reduced.

The Tribune carries a lot of debt, so it is in more trouble that other chains such as The New York Times Company (NYSE: NYT) and Gannett (NYSE: GCI). But, other large paper operations including McClatchy NYSE: MNI) and Gatehouse (NYSE: GHS) also have massive debt burdens from money they borrowed to expand their empires.

What all of this means is that more reporters and editors will lose their jobs and the typical reader will get a newspaper that is thin as toilet paper. For newspaper company investors it means that stocks, some already down 50% to 70% in the last year, are going down even further.

The trouble also may spell the end of nearly a century of big papers like The New York Times being the news sources of record. The company recently cut 100 people, most of them from the news operation. Covering major national and international stories is becoming more difficult and at some point it may be impossible.

There is always CNN.

Douglas A. McIntyre is an editor at 247wallst.com.

Cuts at The Tribune bode ill for The New York Times and Gannett originally appeared on BloggingStocks on Mon, 09 Jun 2008 08:30:00 EST. Please see our terms for use of feeds.

Wall Street Journal special committee is a bunch of saps originally appeared on BloggingStocks on Wed, 30 Apr 2008 16:14:00 EST. Please see our terms for use of feeds.

Will Rupert Murdoch expand his print media holdings? originally appeared on BloggingStocks on Fri, 21 Mar 2008 16:10:00 EST. Please see our terms for use of feeds.

Sam Zell sees real estate turnaround this spring originally appeared on BloggingStocks on Tue, 26 Feb 2008 13:37:00 EST. Please see our terms for use of feeds.

Starwood (NYSE: HOT) is hosting a meeting with sell side community at 7:45 a.m. Eastern time today.

Sam Zell reported a 7.72% stake in HOT on Feb. 4.

Smith Barney says: "We view as a strong vote of confidence in HOT's underlying fundamentals (and asset value) by a sophisticated real estate investor."

HOT overall option implied volatility of 40 is near its 26-week average according to Track Data, suggesting non-directional risk.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update 2-5-08: Starwood volatility flat; Sam Zell owns 7.72% HOT stake originally appeared on BloggingStocks on Tue, 05 Feb 2008 09:44:00 EST. Please see our terms for use of feeds.

Just for fun, the newspaper industry that is facing excruciating pressure as news seekers and advertisers flock to the internet, now has another negative catalyst to deal with. The housing slowdown and sharp drop in sales is causing a significant drop in newspaper advertising for real estate, a significant chunk of many small papers' overall revenue.

The Tribune Company saw a 40% year over year decline in its real estate ad sales for November. Gannett (NYSE: GCI) is also looking at a 27% drop.

This short-term revenue drop that's a result of macroeconomic factors could extend into the long-term. When the housing market does rebound, will people go back to newspapers? Or will have the internet continue to make inroads, hastening the decline of newspapers into oblivion.

As bleak as the outlook for the industry looks, several highly-respected investors have made large bets on it. Sam Zell recently acquired Tribune, and Warren Buffett has been a long-term investor in the sector.

For contrarian investors, the industry may be worth a look.

Newspapers feeling the subprime sting as housing ads dry up originally appeared on BloggingStocks on Fri, 28 Dec 2007 14:05:00 EST. Please see our terms for use of feeds.

Continue reading Tribune Company buyout finalized, no word on the Cubs

Tribune Company buyout finalized, no word on the Cubs originally appeared on BloggingStocks on Fri, 21 Dec 2007 10:52:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• The Wall Street Journal's "Deal Journal" reported that Sam Zell's planned buyout of Tribune Company (NYSE: TRB) is contingent on the receipt of a solvency opinion, and that this is the first time they have ever seen a deal dependant on this.
• The WSJ's "Heard on the Street" reported that Countrywide Financial Corporation (NYSE: CFC) may not be out of the woods yet. Despite executives promising a return to profitability, there is still a risk the company may eventually seek bankruptcy protection or "resort to huge sales" of new stock.
• U.S. private equity group JC Flowers "is understood" to have walked away from the auction for troubled bank Northern Rock, the Financial Times reported.
• Rupert Murdoch is shaking up the management of News Corp (NYSE: NWS.A), the Financial Times reported, giving his son, James Murdoch, control over the company's European and Asian operations, and appointing two trusted executives to lead Dow Jones & Company Inc (NYSE: DJ) and the Wall Street Journal.

• Barron's Online's "Weekly Trader" said AutoNation Inc (NYSE: AN) looks attractive now, despite hovering near a multi-year low. The company has also been on a slow but steady quest to diversify away from unpopular domestic brands by snapping up luxury and import dealerships.

Newspaper wrap-up: Tribune buyout contingent on solvency opinion originally appeared on BloggingStocks on Fri, 07 Dec 2007 08:05:00 EST. Please see our terms for use of feeds.

Tribune (NYSE: TRB) is recently up $32.08.

CNBC's David Faber says the TRB deal could close very soon. TRB has expected its $34 per share sale to Sam Zell, private equity, debt holders and employees to be closed by year-end. The FCC granted temporary waivers to complete the deal. TRB announced this morning it intends to use cash on hand to reduce total amount of bridge loan to $1.6 billion from $2.1 billion. TRB January option implied volatility of 33 is below a level of 79 from Dec 6th and below its 26-week average of 38 according to Track Data, suggesting the close of the $34 deal is near.

Daily Options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update: Tribune (TRB) volatility collapses; Zell's buyout could close soon originally appeared on BloggingStocks on Thu, 06 Dec 2007 12:12:00 EST. Please see our terms for use of feeds.

Continue reading Tribune may sell Cubs, Wrigley Field separately

Tribune may sell Cubs, Wrigley Field separately originally appeared on BloggingStocks on Mon, 17 Sep 2007 16:00:00 EST. Please see our terms for use of feeds.

It is getting very hard to believe that Sam Zell can close his deal to buy-out the public shareholders at The Tribune Company (NYSE: TRB). Shareholders approved the $34 a share deal on Tuesday, but the stock stands at $28.98.

This morning, the Tribune announced that revenue for July fell another 5.9% to $467 million. Advertising revenue tumbled 10.3% to $247 and classified advertising revenues decreased 18.2%. At least sales at the company's TV and radio operations were flat.

According to The Motley Fool "On Monday, in part because of the expected continuing slide in a number of the company's properties, Standard & Poor's took the company's debt to a B + rating from BBB-, casting it smack-dab into the world of "junk." And as if that weren't enough, S&P has indicated that it'll further knock the rating down to B after the deal is completed." The company's debt burden will be $8.2 billion.

A quick look at the Tribune's latest 10-Q shows operating profit of just under $196 million. Perhaps on an annual run rate that could be $800 million a year. Of course, this would depend on revenue staying steady, and that is not going to happen.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Tribune (TRB) numbers get worse as Zell tries to close originally appeared on BloggingStocks on Fri, 24 Aug 2007 10:10:00 EST. Please see our terms for use of feeds.

Continue reading Private equity: Can buyers walk from mega deals?

Private equity: Can buyers walk from mega deals? originally appeared on BloggingStocks on Tue, 21 Aug 2007 16:10:00 EST. Please see our terms for use of feeds.

Top Ten stocks with implied volatility above 105 with volume over 1,000 contracts: TMA, RAS, DFC, BZH, WCI, SPF, IMB, LEND, NFI & QLTI.

Hewlett-Packard (NYSE: HPQ) volatility Elevated into EPS & Outlook. HPQ is recently down $1.02 to $47.42. HPQ will report EPS on 8/16. American Technology say's "anticipate strong July quarter; despite outperformance, we remain buyers." HPQ August straddle is priced at $2.55. HPQ September option implied volatility of 36 is above its 26-week average of 27 according to Track Data, suggesting larger risk.

Wal-Mart Stores, Inc. (NYSE: WMT) volatility above average as WMT trades near 1-year low. WMT is recently down $2.18 to $43.92. WMT reported 2nd quarter net sales increased 8.8% to $91.99 billion, income from continued operations increased 4.1% to $2.98 billion compared to the same period a year ago. Smith Barney says "in addition to the reduction in full-year guidance, management cited continued economic pressure on consumers, which we believe may pressure the stock in the near-term." WMT September option implied volatility of 24 above its 26-week average of 20 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Tribune-TRB volatility at 18-year High as Sam Zell attempts to complete buyout originally appeared on BloggingStocks on Tue, 14 Aug 2007 16:30:00 EST. Please see our terms for use of feeds.