Trib value fell $20 million a day under Zell
Barely six months after acquiring Tribune at a value of $13.2 billion, the company charged off $3.8 billion in newspaper assets, trimming 29% of the value of the enterprise the Zellistas took over in an employee stock ownership plan on Dec. 20, 2007.
The writeoff, which is required by accounting rules, is forced by the sliding sales and profits of the newspaper division.
“Due to the continuing decline in newspaper advertising revenues in 2008,” said Tribune press release today, “the company performed an impairment review of goodwill attributable to its newspaper reporting unit and newspaper masthead intangible assets in the second quarter of 2008.”
In the six months Zell has helmed the company, newspaper sales fell $173.6 million from the first half of 2007, or 10.9%, and operating cash flow tumbled $92.4 million, or 32.5%. Gains in the sales and profitability of the broadcast units improved the performance of the company to the degree that its consolidated sales of $2.1 billion were down 6.2% from the prior year and the operating profit of $313.4 million was off by 8.2%.
The writeoff, which was effective as of the end of June but announced in an earnings release issued today, means the company’s value has dropped $640,518,500 per month on Sam's watch – or some $20 million per day.