Tribune Goes Chapter 11, who is next?

The news of Tribune's bankruptcy filing has been well chronicled already after plenty of rumors. Clearly it's one of those things that was expected eventually given the overall industry decline, but even six months ago Tribune was claiming they had enough cash until at least mid 2009. The filing preceded the sale of the remarkably valuable Chicago Cubs franchise, which was kept out of the filing. My supposition is that they were far enough in the hole that even a billion or so wouldn't have made much difference. It will be a bit of mess for the employees who technically own the company through the stock ownership plan created when Zell structured the take over. I hesitate to call it bought, given the limited amount of personal exposure Zell had in the deal.

The market reaction to the news among peer companies was one of the most interesting factors at play here. News such as this can often have a widespread effect on the sector. Some, such as AH Belo (AHC) and the New York Times (NYT) were fairly static (It's telling that this seems unchanged these days). McClatchy (MNI) and Media General (MEG) finished up the day over 10%, while Lee and Journal Register plunged ever closer to zero. If the market is voting rationally, Lee and Journal Register are perilously close to joining Tribune. While I can believe that AH Belo's stability given it's relatively low debt might have some limited life left, I don't understand McClatchy's lift on the day. Perhaps the rumored sale offer of the Miami Herald has something to do with it, but seriously, who's left to buy it?