A Little More

Crain's Chicago Business has a good, detailed follow-up to today's huge Trib news. Breaking it down:

-The Trib will issue $3.4 billion in debt to buy back stock.
-The Trib will save $54 million per year in reduced dividend outflows
-Bond rating agencies lowered Trib ratings three notches and threatened to lower to junk status if debt is not reduced within 1 to 2 years.
-The Cubs are not currently for sale, but other non-core assets, like the Food Network, are also not for sale unless "we could get the right price (Denis FitzSimons - Trib CEO).

Frankly, this sounds like a crazy plan to appease investors upset by a tanking stock price. There is not one thing in this plan that solves the Trib's real problems: Stagnant revenue growth.

FitzSimons is clearly a man with few ideas on how to turn this stagnant business around. Instead of generating revenues, he's using existing cash flow to finance buying up the share price.

Bully for the shareholders if that's what they want.

But, as soon as the buyback ends, the share will resume their slide. That means more buybacks or a refocusing on core operations. And selling of more non-core ops.

This event just made the Cubs sale more likely, not less.