Fortune's Devin Leonard says Sam Zell, owner of Tribune, is up against it: "Nobody's timing was better at the top of the last boom than Sam Zell. Just before the credit markets collapsed, he sold his real estate empire for $36 billion. Now Zell is trying to sell newspapers, and his timing couldn't be worse."
Leonard says that the Zell deal for Tribune, completed less than six months ago, valued the company's publishing division at 7.6 cash flow--a commonly used method for valuing assets. Now it looks like Zell would only get 6 times cash flow for Newsday, always seen as a blue-chip property.
Why is Zell doing this? Leonard says it's because of the necessity to pay down debt in a business where far less cash is being thrown off than was expected.
--Noel Rubinton