Analysts: Tribune, MediaNews at risk of default

In their memos and speeches, Sam Zell and Dean Singleton seek to portray themselves as pragmatists coming to grips with an industry in decline, trying to educate an unruly horde of journalists about the realities of belt tightening and productivity, trying to thrive in an economic environment of some other god's making.

But maybe they simply bought more house than they could afford. According to a story in Bloomberg (via Romenesko), Zell's Tribune Co. and Singleton's MediaNews Group - along with the Journal Register Co. and Morris Publishing Group - risk defaulting on billions of dollars of debt used to expand their empires:

"These companies built their portfolios using leverage and executing a strategy with an investment thesis that was clearly flawed,'' [president of Grist Mill Advisors Mark] Young said. "Almost all of these are going to have to go through a restructuring or bankruptcy to come out the other side.''

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"It's inevitable that one or more of the many highly levered companies in this industry will get into trouble,'' said Goldman Sachs Group Inc. analyst Peter Appert in San Francisco. "Whether that translates into bankruptcy, only time will tell.''

Now, there are plenty of smart business people who got smacked when the credit bubble exploded. But maybe the Zells and the Singletons of the world would do better to take responsibility for their own bad deals as they gut newsrooms to keep the cash flowing. Instead, they eschew humility and heap on the ridicule.

Or, as Singleton said it: Too many whining editors, reporters and newspaper unions continue to bark at the dark, thinking their barks will make the night go away. They fondly remember the past as if it will suddenly re-appear and the staffing in newsrooms will suddenly begin to grow again.