Syndicators Put Price on Tribune Bankruptcy

The collateral damage from Tribune's bankruptcy filing in December is rippling through the syndication industry, with Disney-ABC Domestic Television taking a $60 million writedown on deals with the TV station owner and News Corp. setting aside $10 million to deal with the problem. On top of those charges, Time Warner, which owns Warner Bros. Domestic Television Distribution, set aside $30 million to account for bankruptcies from several companies it does business with. Tribune gets shows including "Two and a Half Men" from Warner Bros. Tribune's bankruptcy occurred at a crucial time in syndication, as distributors struggle to preserve the economic model that supports first-run programming. Cash-strapped stations, fighting advertising declines, have less money to pay for shows with higher production values. The recession could amplify that dynamic, creating a vicious cycle of stations being able to afford only lower-quality shows that get lower ratings, which in turn generate less advertising revenue to pay for better first-run fare. The full dimensions of Tribune's bankruptcy are not yet clear.