Tribune Weighs Sale Of Media Services Unit
This story was written by Joseph Weisenthal.
Tribune may shed more baggage as it seeks to climb out from its enormous debt load. The privately-held company is weighing a sale of Tribune Media Services, a unit that aggregates and distributes news and entertainment content across multiple platform. According to FT, the unit has annual EBITDA of $25 million and could fetch as much as $200 million. A Chicago Tribune report quotes a Tribune spokesperson saying the company has fielded offers, but that no deal was assured. Amongs TMS' varied products: various wire services, print magazine services, and online data sources.
FT: "The sale could spark interest both from private equity investors and from corporate buyers within the media industry, such as cable operators or internet-based content providers, who may be interested in the unit's content provision, people familiar with the process said. Tribune, however, remains in a significant financial quandary. If it continues with its efforts to sell off assets, analysts expect the company will be able to make payments on its debt through to the end of 2009. However, each time it sells an asset at a valuation of less than nine times cash flow, its leverage ratio rises. Covenants on Tribune's loans require it to generate enough cash flow to cover one-ninth of the value of its guaranteed debt. The company has few, if any, assets in its portfolio that could win that high a price."
By Joseph Weisenthal