Ziff Davis Files for Chapter 11: Cripes.

In News on March 13, 2008 at 10:10 am


This came in a little late, thanks to the new job that I’ve settled into that’s pretty much sucked out the social and blogging life outta me. Anyway, as reported on March 5 by the Associated Press, Ziff Davis filed for bankruptcy. As Dvorak must have said: Cripes.

Ziff Davis Media Inc., publisher of technology and video game magazines, filed for bankruptcy on Wednesday and cited a decrease in revenue from print advertising and subscriptions as contributing to its decline.

But the company said it expected to reorganize quickly and exit court protection by midsummer.

New York-based Ziff Davis said in a court filing that it had about $500 million in liabilities and $313 million worth of assets, as of the end of December. It filed for Chapter 11 protection to restructure debt that had become burdensome.

“We feel like we’re in a position poised for wonderful growth,” Ziff Davis Chief Executive Jason Young said Wednesday. “We just needed to solve this issue.”

The company is the publisher of PC Magazine and Electronic Gaming Monthly and Web versions of those magazines.

Ziff Davis reached an agreement with senior creditors, to whom it owes $225 million. Under the deal, the senior creditors will be owed $57.5 million and at least 88.8 percent of the common stock in the company once it emerges.

The company was unable to reach an agreement with more junior creditors, and is looking to use the court process to resolve that. Another 11.2 percent of the reorganized company’s stock is available for distribution to those debt holders under the company’s current proposal, but those creditors are likely to seek more equity in court.

Have to say that the news took me by surprise, seeing that Ziff Davis are doing a great job at making the transition from print to online media with its multitude of video podcasts and articles posted online. But it looks like a company that “reaches 26 million consumers through 16 Web sites, three magazines and direct marketing,” still isn’t good enough.

It’s not over for ZD yet, but then again, Chapter 11 is never good news.

  1. big, surprising news… i always thought cnet would go before zd…

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