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The END may be near for EGM/1UP

August 16th, 2007, 22:59 Posted By: bandit

Ziff Davis Media has finally hit the wall.

The embattled tech media company - which has teetered on the brink for over a year as it tried to sell itself in pieces to get out from under a mountain of debt - said it skipped an interest payment due yesterday and was entering into negotiations with debt holders to restructure about $390 million in debt.

"It's about correcting a capital-debt structure," said Young, who added that he could not speculate on what terms would be offered to debt holders.

Said one industry observer yesterday, "They are playing hardball with their lenders by withholding payments. It was inevitable. They were in a cash crunch and it was just a matter of time."

The company said it has retained Alvarez & Marsal to handle the restructuring. Alvarez & Marsal have done work in the past for companies such as Timex, DoubleClick and Levi Strauss.

In the most recent fiscal year ending Dec. 31, 2006, Ziff Davis Media had $181 million in revenue and cash flow of $27.1 million. The company also said it was going to delay filing its quarterly fiscal report for the period ending June 30.

Having worked in printing publications for a Latino Magazine, MAD Magazine and partially for DC Comics, the industry is very hard to stay a float considering everything is going to digital these days. Tips & Tricks, Official Xbox Magazine and others have closed. Time Warner had sold or closed numerous magazines of their own as well. It was a matter of time. Hopefully EGM and 1UP will survive this downfall and be picked up by someone else.

Source: NYPost

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