Skip to main content

Tribune, Blagojevich: not a great day for Chicago

No matter where you are in the country, you've probably seen the news today about the Tribune bankruptcy and the story surrounding Illinois Governor Blagojevich's arrest/corruption scandal.

I think the post title says it all, but let's include some actual news coverage of these events, just to make sure we're all up to speed.

Would it be strange to start off with coverage on the governor's arrest from the very paper (Chicago Tribune) whose editorial board was quietly threatened by said governor due to critical coverage of his term in office? It would? Well, let's do it anyway.

From the Chicago Tribune:

"Gov. Rod Blagojevich and his chief of staff, John Harris, were arrested today by FBI agents for what U.S. Atty. Patrick Fitzgerald called a "staggering" level of corruption involving pay-to-play politics in Illinois' top office.

Blagojevich is accused of a wide-ranging criminal conspiracy, including alleged attempts by the governor to try to sell or trade the U.S. Senate seat left vacant by President-elect Barack Obama in exchange for financial benefits for the governor and his wife. Blagojevich also is accused of obtaining campaign contributions in exchange for other official actions."

I'm sure the nation will be shocked, shocked!, by this latest turn in Illinois politics. Remember, when it comes to politics, this is just the stuff that actually makes it into the newspapers...

Back to the newspaper company in question: the Tribune Company, publishers of the Chicago Tribune. Tribune has filed for bankruptcy after struggling under the weight of too much debt and a dying industry business model.

Will a Tribune Co. bankruptcy/restructuring lead a refocusing of the newspaper industry? Mark Trumbull at CSMonitor has some thoughts on the industry's future:

"...Few expect newspapers, any more than cars, to suddenly disappear. But an already difficult industry transition now looks harder. More bankruptcies seem likely, and some papers will simply shut their doors.

"This perfect storm of events has sucked in every player in the industry with astonishing speed," says Paul Gillin, a Boston-area media analyst and consultant. Yet he predicts that out of the chaos "will emerge a new kind of media, a new kind of journalism." "

Personal take: I grew up reading the Chicago Tribune. I stopped reading it, for the most part, several years ago. When I see the paper now, it looks and reads like a cheap tabloid news rag. I wonder if the layout redesigns and news staff cutbacks helped hasten the company's decline.

Back in 2007, I thought if anyone could pull off a vanity investment in a big city newspaper company, it would be canny old Sam Zell. He was ready for a challenge and flush with success from the then recent $39 billion sale of EOP to private equity Blackstone.

Unfortunately, since then, the Tribune newspaper offices and Wrigley Field have not been as easy to sell.

Popular posts from this blog

Nasdaq credit rating junked.

S&P cut Nasdaq's credit rating to junk status citing debt burdens and its questionable strategy to buy a controlling interest in the London Stock Exchange. Financial Times reported that the exchange's counterparty credit & bank loan rating were lowered fromm BBB- (lowest investment grade rating) to BB+. The change will increase Nasdaq's borrowing costs should it wish to pursue aquisition targets. For an earlier look at the exchange consolidation trend that brought about Nasdaq's push for a stake in the LSE, please see "Exchange fever" .

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of GreenStockInvesting.com , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean ...

Seth Klarman: Margin of Safety (pdf)

Welcome, readers! Signup for free email updates at the Finance Trends Newsletter . Update: PDF links removed due to DMCA notice. Please see our extensive Klarman book notes below. New visitors, please check the Finance Trends home page for all new posts. Here's something for anyone who has been trying to get a look at Seth Klarman's now famous, and out of print, 1991 investment book, Margin of Safety .  My knowledge of value investing is pretty much limited to what I've read in Ben Graham's The Intelligent Investor (the book which originally popularized the investment concept of a "Margin of Safety"), so check out the wisdom from Seth Klarman and other investing greats in our related posts below. You can also go straight to Ronald Redfield's Margin of Safety book notes .    Related posts: 1. Seth Klarman interviews and Margin of Safety notes     2. Seth Klarman: Lessons from 2008 3. Investing Lessons from Sir John Templeton 4. ...