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US Newspapers Resorting To Closures, Bankruptcy
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| Associated Press |
By John P. Connolly, The Bulletin
Four companies that own 33 daily U.S. newspapers have filed for bankruptcy or were put up for sale in the past three months, threatening to close papers that fail to restructure their debt or find buyers.
The San Francisco Chronicle became the latest casualty of a struggling print news industry. Hearst Corporation, the parent company of The Chronicle, announced this week that if it cannot adequately and quickly slash expenses, then it would close or sell the paper.
The Chronicle is northern California’s largest newspaper with a paid weekday circulation of 339,430. If the paper closes, the only other newspaper in San Francisco would be The San Francisco Examiner, which is owned by the Anschutz Company.
Hearst purchased The Chronicle in 2000 for $660 million and was quickly affected by the rise of Internet news. The Chronicle’s circulation dropped by 16 percent between 2004 and 2005, and in 2006, daily circulation dropped from 400,906 to 373,805. The Chronicle reportedly lost $50 million last year.
Also on Hearst’s list of troubling papers is the Seattle Post-Intelligencer, which will cease operations if a buyer isn’t found before early April. A similar fate awaits Scripp’s Rocky Mountain News in Denver and Gannett’s Tucson Citizen in Arizona.
The Post-Intelligencer has lost money every year since 2000, including a $14 million loss in 2008, with a projection for a worse performance in 2009. The paper fought for four years to keep the Seattle Times in a joint operating agreement designed to exempt newspaper from antitrust laws to allow the survival of multiple daily newspapers in a given urban market. The Times, which was forced to share advertising revenue and operating facilities with the Post-Intelligencer, agreed in 2007 to continue the arrangement until 2016.
Hearst announced in January if a buyer was not found, the Post-Intelligencer will either be closed or become an Internet-only publication.
Several paper-publishing companies have filed for bankruptcy protection this year and the bleak outlook for the newspaper industry suggests that things may get worse before they get better.
The Journal Register Company, a Yardley newspaper publisher, filed for bankruptcy protection this week, seeking to remove $420 million of debt owed by the company. Journal Register reported $596 million in assets as of Nov. 30 and $692 million in debt, including unpaid interest. Revenue has fallen more than 20 percent since 2006, according to the bankruptcy court filing.
In the documents, company chairman and chief executive James W. Hall said the recession has placed an even greater burden on an already distressed industry.
Journal Register’s proposed restructuring plan would allow the company, which owns 20 daily and 159 non-daily newspapers and employs about 3,500 workers, to continue business as usual. The plan has support from J.P. Morgan Chase and 26 of 37 lenders who are part of the company’s credit accord. The supporting lenders represent 77 percent of the company’s debt.
Journal Register serves greater Philadelphia, Michigan, Connecticut, the greater Cleveland area and parts of New York state. Its newspapers include the New Haven Register in Connecticut, a number of suburban Philadelphia newspapers and the Trentonian in Mercer County, N.J.
Journal Register stock, which traded as high as $23.87 a decade ago, was removed from the listings of the New York Stock Exchange in April. It currently trades for less than 1 cent per share.
Chicago-based Tribune Company, which publishes the Chicago Tribune, Los Angeles Times and Baltimore Sun, filed for bankruptcy in December of 2008. Tribune Company owed more than $13 billion in debt, and the fate of many of its assets remains in question. The company recently withdrew plans to put the iconic Tribune Tower up for sale because of the moribund real estate market.
In Minneapolis, the Star Tribune was purchased in 2007 for $530 million by Avista Capital Partners, a private equity group. The purchase was only about half the amount paid for the enterprise by the seller, McClatchy Company. Avista still owes lenders $493 million, and filed for bankruptcy protection in January. Avista reportedly estimated assets at the Star Tribune of about $100 million, and estimated up to $1 billion in debt.
Philadelphia Newspapers LLC, a subsidiary of Philadelphia Media Holdings (PMH), filed for bankruptcy this week. PMH is the parent company for The Philadelphia Inquirer and Daily News. PMH paid $562 million for the papers in 2006, and the group still owes lenders $390 million.
According to the bankruptcy filing, Philadelphia Newspapers only has about $7.5 million of cash and requires $1.7 million to operate the next two weeks when the next bankruptcy hearing is scheduled. The bankruptcy judge mentioned that Philadelphia Newspapers has not yet paid its filing fees at this week’s hearings and requested it be immediately paid.
John P. Connolly can be reached at jconnolly@thebulletin.us
The San Francisco Chronicle became the latest casualty of a struggling print news industry. Hearst Corporation, the parent company of The Chronicle, announced this week that if it cannot adequately and quickly slash expenses, then it would close or sell the paper.
The Chronicle is northern California’s largest newspaper with a paid weekday circulation of 339,430. If the paper closes, the only other newspaper in San Francisco would be The San Francisco Examiner, which is owned by the Anschutz Company.
Hearst purchased The Chronicle in 2000 for $660 million and was quickly affected by the rise of Internet news. The Chronicle’s circulation dropped by 16 percent between 2004 and 2005, and in 2006, daily circulation dropped from 400,906 to 373,805. The Chronicle reportedly lost $50 million last year.
Also on Hearst’s list of troubling papers is the Seattle Post-Intelligencer, which will cease operations if a buyer isn’t found before early April. A similar fate awaits Scripp’s Rocky Mountain News in Denver and Gannett’s Tucson Citizen in Arizona.
The Post-Intelligencer has lost money every year since 2000, including a $14 million loss in 2008, with a projection for a worse performance in 2009. The paper fought for four years to keep the Seattle Times in a joint operating agreement designed to exempt newspaper from antitrust laws to allow the survival of multiple daily newspapers in a given urban market. The Times, which was forced to share advertising revenue and operating facilities with the Post-Intelligencer, agreed in 2007 to continue the arrangement until 2016.
Hearst announced in January if a buyer was not found, the Post-Intelligencer will either be closed or become an Internet-only publication.
Several paper-publishing companies have filed for bankruptcy protection this year and the bleak outlook for the newspaper industry suggests that things may get worse before they get better.
The Journal Register Company, a Yardley newspaper publisher, filed for bankruptcy protection this week, seeking to remove $420 million of debt owed by the company. Journal Register reported $596 million in assets as of Nov. 30 and $692 million in debt, including unpaid interest. Revenue has fallen more than 20 percent since 2006, according to the bankruptcy court filing.
In the documents, company chairman and chief executive James W. Hall said the recession has placed an even greater burden on an already distressed industry.
Journal Register’s proposed restructuring plan would allow the company, which owns 20 daily and 159 non-daily newspapers and employs about 3,500 workers, to continue business as usual. The plan has support from J.P. Morgan Chase and 26 of 37 lenders who are part of the company’s credit accord. The supporting lenders represent 77 percent of the company’s debt.
Journal Register serves greater Philadelphia, Michigan, Connecticut, the greater Cleveland area and parts of New York state. Its newspapers include the New Haven Register in Connecticut, a number of suburban Philadelphia newspapers and the Trentonian in Mercer County, N.J.
Journal Register stock, which traded as high as $23.87 a decade ago, was removed from the listings of the New York Stock Exchange in April. It currently trades for less than 1 cent per share.
Chicago-based Tribune Company, which publishes the Chicago Tribune, Los Angeles Times and Baltimore Sun, filed for bankruptcy in December of 2008. Tribune Company owed more than $13 billion in debt, and the fate of many of its assets remains in question. The company recently withdrew plans to put the iconic Tribune Tower up for sale because of the moribund real estate market.
In Minneapolis, the Star Tribune was purchased in 2007 for $530 million by Avista Capital Partners, a private equity group. The purchase was only about half the amount paid for the enterprise by the seller, McClatchy Company. Avista still owes lenders $493 million, and filed for bankruptcy protection in January. Avista reportedly estimated assets at the Star Tribune of about $100 million, and estimated up to $1 billion in debt.
Philadelphia Newspapers LLC, a subsidiary of Philadelphia Media Holdings (PMH), filed for bankruptcy this week. PMH is the parent company for The Philadelphia Inquirer and Daily News. PMH paid $562 million for the papers in 2006, and the group still owes lenders $390 million.
According to the bankruptcy filing, Philadelphia Newspapers only has about $7.5 million of cash and requires $1.7 million to operate the next two weeks when the next bankruptcy hearing is scheduled. The bankruptcy judge mentioned that Philadelphia Newspapers has not yet paid its filing fees at this week’s hearings and requested it be immediately paid.
John P. Connolly can be reached at jconnolly@thebulletin.us
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