BLOOMBERG: Philadelphia Media Holdings LLC lenders blocked a June 1 interest payment after the company, owner of the Philadelphia Inquirer, fell into technical default on loan covenants, Standard & Poor’s reported. The two sides are negotiating to resolve the default, Standard & Poor’s Leveraged Commentary & Data said today, citing unnamed sources with knowledge of a Citizens Bank-led phone call Wednesday in which lenders learned of the missed payment. The company is seeking an $8 million equity investment, S&P said. In January, Chief Executive Officer Brian Tierney warned of “a dire situation” if costs weren’t cut by 10 percent by the “summer or fall.” He said the cuts were necessary to meet debt payments to lenders led by the Royal Bank of Scotland and Wachovia Bank. Tierney led the Philadelphia investors who bought the publications from McClatchy Co. in June 2006. MORE
RELATED: Tribune Company newspapers like The Los Angeles Times and The Chicago Tribune will quickly cut costs — by printing fewer papers and employing fewer journalists — top company executives said on Thursday. Samuel Zell, the chairman and chief executive of Tribune, and Randy Michaels, the company’s chief operating officer, revealed the cuts during a conference call with Wall Street analysts. They also said the struggling company has looked at the column inches of news produced by each reporter, and by each paper’s news staff. Finding wide variation, they said, they have concluded that it could do without a large number of news employees and not lose much content. They said the company would aim for a 50-50 split between ads and news across all the news pages (excluding classified ads and advertising supplements). Mr. Michaels said this would mean eliminating 500 pages of news a week across all of the company’s 12 papers. MORE