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The Los Angeles Times had "one of the worst quarters we have ever experienced" as advertising fell and cash flow dropped 27 per cent, the newspaper's publisher said in a memo to employees.
Second-quarter sales slid 10 per cent, publisher David Hiller wrote. A slump in advertising pages overwhelmed gains in web ads and newspaper supplements, he said.
The LA Times is the largest newspaper owned by Chicago-based Tribune, which has agreed to be bought in an US$8.2 billion ($10.4 billion) leveraged buyout led by investor Sam Zell and an employee stock ownership plan.
"It's going to cast a pall over the deal," said analyst Ed Atorino of Benchmark Co in New York. "The stock is going to go down."
