UPDATE 1-Tribune seeks court OK for layoff, bonus payments
* Top executives ineligible for bonus payments
* Bonuses are for help in selling assets, cutting costs
NEW YORK, April 22 (Reuters) - Tribune Co (TRBCQ.PK) asked a bankruptcy court on Wednesday to authorize severance payments to workers laid off before the media company's Chapter 11 filing in December and to pay bonuses to about 700 employees.
In two motions filed with the U.S. Bankruptcy Court in Delaware, Tribune said the bonus payments would amount to about $13 million. The severance payments, which were halted by Tribune's bankruptcy filing, would be about $2.5 million.
Tribune's top 10 executives, including Chief Executive Sam Zell, the real estate mogul who engineered the newspaper publisher and broadcaster's $8.2 billion buyout, would not be eligible for the bonuses.
The motions come on the same day that the Chicago Tribune, the company's hometown paper, said it would cut 53 newsroom positions, or about 11 percent of its news staff, to save money and refocus its efforts on local news coverage.
The bonus payments, Tribune says, are to reward efforts in 2008 that it said could generate about $425 million in annualized cashflow.
They include a redesign of eight daily papers that Tribune undertook to make them look fresher and more attractive to wider audiences, and to save money on their production. Tribune expects the redesigns to save about $80 million annually.
It also said the payments would reward employees' efforts for helping close transactions that generated more than $1 billion in proceeds.
Those include selling most of the Newsday newspaper on Long Island, New York, to Cablevision Systems Corp (CVC.N), which brought $612 million to Tribune. They also include selling 10 percent of Tribune's interest in online jobs site Careerbuilder.com to Gannett Co Inc (GCI.N) for net proceeds of almost $130 million.
Tribune also disclosed in its motions that its publishing segment generated $461 million in operating cash flow in 2008 at a margin of about 16.7 percent -- an amount that the company characterized as impressive at a time when many newspapers are facing mounting losses and possibly closing down.
Tribune cut its workforce by 2,400 jobs last year, or about 13 percent of the total, including 2,100 jobs at its publishing division, the company said. Some employees stopped getting severance pay as a result of the bankruptcy filing.
The company filed for Chapter 11 bankruptcy protection in December after being unable to handle a $13 billion debt load as a result of the Zell-led buyout. (Reporting by Robert MacMillan; Editing by Richard Chang)
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