Liar, Liar, Pantz on Fire

Yesterday, Zell gave an exlusive interview to Bloomberg Television. There, he boasted that he will have no problem paying off the massive $13 billion debt which he owes from his purchase of the Tribune Co.

The newspaper publisher has no liquidity issues and can handle scheduled debt payments for the next seven years, Zell said.

``We don't have any real maturities that aren't covered until 2015,'' he said.

The market called bullshit the very next day. On Friday, Fitch Ratings dropped the Tribune's debts to junk status. The paper was in danger of defaulting on its loans.

Fitch Ratings, citing the "rapidly deteriorating" conditions in the newspaper industry, lowered its ratings on Tribune Co.'s $13.4 billion in outstanding debt.

Given the accelerating decline in newspaper advertising revenue and cash flow at the Chicago media holding company, Fitch said, and in view of the fact that there is "no evidence" the pressures on the industry will be relenting any time soon, Fitch lowered its issuer default rating from "B-minus" to "CCC."

A "CCC" rating, the rating concern said, indicates that there is a "real possibility" the issuer could default. The low rating also suggests that the issuer's ability to meet financial commitments "is vulnerable to deterioration in business and economic conditions," Fitch said.

Wanna bet what happened here? Zell gets word that Fitch is going to cut his bonds to junk. So he gives this full-of-crap, last-minute interview to try to spin the results around. Who do you believe? The man with a financial interest? Or the market?

The whole performance was just another show of the total contempt that Zell has for journalism. Sam Zell is now the owner of a media company. He's supposed to have at least some tangential deference to the truth. Instead, he showed that he views the media as nothing more than a glorified marketing tool. Not a bad business tactic, perhaps. But not something you'd like to see in a newspaper publisher.