ANTenna Blog -- The rANT

The Tribune Company -- which owns the Chicago Tribune, the LA Times, and the Chicago Cubs, among many other things -- filed for bankruptcy protection today. It didn't have to happen.

Most news reports blame the economy and problems in the publishing industry, but they're missing the point. The rANT blames a greedy leveraged buy-out.

Last year, the Tribune Company was sold to Sam Zell in a complex deal worth $8.2 billion in mostly borrowed money. The company ended up with some $12 billion in debts. That's right, $12 billion! So in addition to funding the operations of its 23 TV stations and 12 newspapers, the company also has to service that debt, and that's what it doesn't have enough money to do. According to the company's own LA Times, "Among other obligations, a $512-million principal payment related to Zell's leveraged buyout is due in June."

That's a half a billion dollars in a single payment. How would your company do if in addition to its everyday business, it had to pony up half a billion dollars in debt payments?

So despite Zell's claims that "Our challenges are consistent with those facing all media companies, and an increasing number of companies across a variety of industries today," it simply ain't so. He's blowing smoke to make it sound like it's not all about the disastrous deal where the Tribune's owners got paid $34 share -- with a huge chunk for the Chandler family, which had once owned the LA Times -- but left the company a hollowed out shell of its former self.

The rANT is no Cubs fan, but anyone who cares about the media -- or baseball -- should be mad a lot madder at Sam Zell and the Chandlers than they ever were at poor Steve Bartman.

What's worse, it didn't take a rocket scientist -- or an ANT -- to see this coming. Lots of people could read the writing on the wall.

So The rANT has one small request for all the business owners out there. If you want to sell your company, fine. You own it, you can do what you want with it. But don't fool yourselves that some highly leveraged speculative buyout plan will both make you rich and maintain your company's health. You can't pull all the money out of the company and not affect its future. You can't have your cake and eat it, too.