JoongAng Ilbo Faces Crisis Over 137 Billion Won Debt; Fate Hinges on 700 Billion Won Broadcasting Rights

As five affiliates of the JoongAng Group, including its holding company and JTBC, have entered a domino effect of rehabilitation procedures, JoongAng Ilbo has disclosed that it is facing an event of default on 137 billion won in corporate bonds.

An event of default (acceleration of debt) occurs when a creditor recalls a loan before its maturity date due to an increase in the debtor's credit risk.

When JoongAng Ilbo signed a contract for bearer unguaranteed private bonds in February, it included a clause stating that the benefit of time would be lost if the issuer's corporate credit rating, assigned by Korea Investors Service and Korea Ratings, fell by one notch or more compared to the previous rating. With JTBC recently experiencing a default of 20.6 billion won, JoongAng Ilbo's own credit rating was downgraded, triggering this clause.

The market is closely watching whether this situation will spread beyond the JoongAng Group to the broader bond market.

Lee Seung-jae, an analyst at iM Securities, stated, "The possibility of the JoongAng Group crisis spreading as a risk to the bond market is limited." However, he added, "In a situation where liquidity in the corporate bond market for ratings of BBB0 or lower is restricted, investor sentiment toward lower-rated bonds may weaken, and the trend of declining net issuance for BBB0 or lower corporate bonds could be prolonged."

Meanwhile, analysts suggest that sports broadcasting rights worth 700 billion won could become a critical variable in the JoongAng Group's M&A process.

Phoenix Sports, a subsidiary of Contentree JoongAng, an affiliate of the JoongAng Group, has secured large-scale broadcasting rights for the Olympics and the World Cup from 2026 to 2032, valued at 700 billion won.

This is now considered a key variable in the rehabilitation process.

A lawyer specializing in insolvency cases noted, "If the 700 billion won in broadcasting rights acts as a burden on potential buyers, it could become an obstacle to the M&A. Conversely, given that these are highly scarce content assets, they could also serve as a factor that enhances the company's value."

Reported by Kim Jiuk | Video by Seo Byeong-uk | Graphics by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.