What has happened?

JTBC was originally a loss-making broadcaster. While its news had influence, it was not a profitable structure.

Production costs continued to rise while advertising revenue was declining.

The problem was that JTBC was not the only one facing this issue.

The Joongang Group relied heavily on content businesses, including broadcasting (JTBC), drama production (SLL), film investment and distribution (Contentree Joongang), cinemas (Megabox), and newspapers (JoongAng Ilbo).

However, after COVID-19, the cinema industry collapsed, and competition in OTT services worsened the profitability of drama production.

It was good when Netflix was spending money.

Production companies enjoyed a boom with investments in the hundreds of billions of won.

But as global OTT companies began to reduce their investment from 2024 to 2026, the situation changed.

Production costs remained the same, but selling prices dropped.

Ultimately, the entire content industry fell into a profitability crisis.

How did the Joongang Group manage to survive until now?

The answer is "borrowing." In simple terms, they operated on debt.

Affiliated companies guaranteed each other, provided funding agreements, and issued asset-backed securities to continuously secure necessary funds.

The problem is that for this structure to work well, they must be able to borrow money continuously from the financial market.

However, interest rates have risen.

The 7.1% annual interest rate mentioned in the article is effectively a level applied to "risky companies."

This indicates that the market did not view the Joongang Group's financial status positively.

Ultimately, JTBC was unable to repay 20.6 billion won. "Unable to repay the due amount?" At this moment, the game is over in the financial market.

Thus, its credit rating dropped to D.

The bigger problem is the chain effect among affiliates. It was not just JTBC that borrowed money; the affiliates were interconnected.

For example, when Company A borrows money, Company B guarantees it, and when Company B borrows money, Company C guarantees it.

If one collapses, the other companies are also at risk. This is why JoongAng Ilbo's credit rating also plummeted.

In fact, what the financial market fears most is not the losses but uncertainty.

"Will this company be able to repay the money next month?" Once doubts arise, no one will lend money.

That is why they applied for rehabilitation.

Many people think of rehabilitation as synonymous with "bankruptcy," but it is actually different.

Rehabilitation is a process of restructuring debt under court protection.

It is similar to Chapter 11 in the United States.

The company does not immediately close its doors. It is highly likely that JTBC's broadcasting will not be suspended right away.

News will continue to be produced, and some drama productions may continue. However, creditors are likely to incur significant losses.

In particular, investors in the asset-backed securities mentioned in the article may experience considerable shock.

The possibility of principal loss has become a reality.

The shocking reason for this incident is not simply because of JTBC.

It is interpreted as a signal that the entire Korean media industry has entered a structural crisis.

Newspapers are seeing a decline in advertising,

broadcasting is experiencing falling ratings,

cinemas are seeing a decrease in audiences,

and drama production companies are suffering from reduced OTT investments.

In the past, media companies made good profits.

But now, companies that create content have become one of the most challenging industries.

This situation may normalize through court rehabilitation.

However, from the perspective of the Joongang Group, it is not an exaggeration to call this the biggest crisis since its founding.

In particular, the fact that "JTBC received a D credit rating" is likely to be recorded as a very unusual event.