Thursday, December 11, 2008

Newspapers & the Clusterf#@k to the Poor House

Jon Stewart dedicated his "Clusterf#@k to the Poor House" segment yesterday to newspapers.
He joked:

"What's black and white and completely over?"
"Give up? It's newspapers."
Stewart dramatically declared that major newspapers companies are in turmoil because of,


Specifically Craigslist which has brought about the industry's demise.
"Online ads are cheaper, they receive wider distribution, and, perhaps most importantly, many newspapers still stubbornly refuse to post classified ads like, '57 Year Old Man looking for No-Strings-Attached Shemale Scat Gang Bang."

LibertyAir Blog

It has been a bad year for newspapers in what has been a long line of bad years for the newspaper industry. Just recently the nation's leading newspaper publisher, Gannet, predicted its full-year sales would fall about 8 percent, but its forecast was largely in line with analyst expectations. At the same time the Tribune Co. Los Angeles Times, Chicago Tribune, The Sun of Baltimore, along with other dailies has the distinction of being the first major newspaper publisher to seek bankruptcy protection.

Advertising revenue has been falling across the board. Losses from the shift of readers to the Internet were exacerbated this year as consumers and advertisers alike pulled back spending in a deepening recession. Although most papers have remained profitable, they have counted on generous cash flows to pay interest and principal on loans.

Though some large papers are missing their payments. The Star Tribune of Minneapolis skipped a $9 million quarterly debt payment in September to conserve cash. Around the same time, the investor group that owns The Philadelphia Inquirer and the Philadelphia Daily News skipped an unspecified interest payment in an apparent bid to force lenders to renegotiate.

Other publishers have begun talks with lenders to win flexibility on required financial targets that are more difficult to meet as revenue shrinks, even if debt itself does not increase and a company continues to make basic payments.Those chains include Freedom Communications Inc., which owns The Orange County Register in Southern California, and Media General Inc., which publishes the Richmond Times-Dispatch in Virginia. Failure to win new terms could prompt companies to miss required targets, leading to technical default.

The Tribune bankruptcy could have ripple effects in the industry, by making new financing more difficult or more expensive for the Times and other publishers. That's because default on loans is seen as more likely and creditors could get nothing as part of Tribune's reorganization.

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