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NEWS > BUSINESS > BALLY TOTAL FITNESS FILES FOR BANKRUPTCY AS PEOPLE BEGIN EATING LESS

BALLY TOTAL FITNESS FILES FOR BANKRUPTCY AS PEOPLE BEGIN EATING LESS

December 3 2008

New York, NY – For the second time in two years Bally Total Fitness has filed for chapter 11 bankruptcy protection. The Chicago based exercise giant, burdened with a massive $800 million dollar debt, and is hoping the restricting will allow them to shed the massive weight they have amassed amidst the credit crunch.

“Bally's long-term debt and lack of refinancing options left it with limited alternatives,” said Chief Executive Michael Sheehan. “Despite ongoing efforts to cut expenses and streamline operations we are still left with a significant amount of debt that just will not go away. We’ve tried traditional methods of reducing the size of our debt but have decided that we need to take more drastic measures to reduce the size of our debt so that we can live a long life.”

The company is blaming, in part, the dip in the economy for the filing but does acknowledge that the growing girth of the company has been a significant factor in the burgeoning debt.

“We have no comment on possible gym closings or membership issues,” said company spokesperson Larry Larsen. “There are many factors that have contributed to our current state and we will have to look at the status of all of our assets.”

Part of the blame is being levied directly at the downturn in the economy, both directly and indirectly. While consumer industries have been experiencing declines in revenue as consumers hold more tightly to their dollars, Bally’s is blaming the downturn in food consumption for the decreasing revenues.

“Budget food such as spam and staples such as rice have had a significant leap in sales since the downturn as people realize that they can survive without McDonald’s and other rich junk food,” said Scrape TV Health analyst Rebecca Phelps. “Of course situations like this also cause people to reassess not only their needs, but how they go about satisfying those needs. With exercise people are likely just starting to realize that they can go outside and run rather than paying a yearly fee. I think it’s very unlikely that people are starting to eat less, this is the United States after all.”

The United States of course has been battling a growing obesity epidemic, with ever growing numbers of adults and children suffering ever growing waistlines. This latest bankruptcy filing leaves many health officials concerned that waistlines will continue to grow.

“While the lack of money will likely force people to eat food that is natively better for them, the level of consumption is unlikely to go down. Combine that with a decrease in exercise and we could be in for a major health crisis,” continued Phelps. “Of course people prone to actually go to exercise clubs and actually exercise will probably continue to exercise. The portion of the population that buys memberships and goes once or twice just to feel better about themselves are unlikely to be significantly affected by any kind of closures. They will probably just continue to get as fat as they were ever going to get.”

Bally’s also cites equipment repair and towel cleaning as another significant contributor to the increasing debt.

William Ashford, Business Correspondent

NEWS > BUSINESS > BALLY TOTAL FITNESS FILES FOR BANKRUPTCY AS PEOPLE BEGIN EATING LESS

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