There’s a bright side to daily papers declaring bankruptcy, Brendan—at least according to a commenter at TPM:
The problems are well documented by now—classified advertising (the most profitable part of the old print model) is done much better and much more cheaply online, young (and not so young) readers prefer the immediacy of the online channel, core display advertising clients have consolidated (fewer department stores, cellular providers, etc.). Meanwhile, advertising revenues always fall in a down economy (and this is a very down economy).
But, most of these businesses are still fine on an operating basis (i.e., they make money before interest and taxes). Having gone public (seemed like a good idea at the time given the 20% margins, etc.) and subsequently having been leveraged to the hilt, they are getting killed on debt-service as well as in the public equity markets (which prices assets based on future growth potential). For goodness sakes, every single operating entity owned by the now bankrupt Tribune Company is making money… So, these bankruptcies may in the medium to long run be good for journalism (in the traditional sense). Assuming the new owners emerge from bankruptcy with limited debt, the papers have many positive attributes upon which to earn a reasonable profit while building new sources of revenue.
I cannot imagine The Stranger has been immune to this either?
You are a weekly paper that is funded solely by ad revenues, correct?
Yeah, right. It’s good that the best paper in Seattle is going TU. Not bankrupt – out of business. Or the best paper in Denver too. Yeah, that’s a really fucking great thing alright.
denial…
In the meantime, every paper will kill all content except sports and Marmaduke before they come out bankruptcy.
Well, isn’t the PI owned by Hearst? And, isn’t Hearst going to sell the PI or shut it down? Hearst is a private company, so they don’t face the public company pressures that this person describes. Hearst isn’t stupid, if a business isn’t making money and they don’t foresee being able to turn it around, they’re going to sell or shutter it. This is true even if the company as a whole is profitable…
Bankruptcies are usually good excuses to break union contracts.
Yes, Julie, the P-I is owned by Hearst and they are a private company. They can take a loss if they feel like it because there’s no pressure from stockholders. But, eventually, even they need to make their businesses profitable. And, alas, that day has come.
Instead of “print” media, how about DVDs? Deliver a DVD to my door each morning with the news and ads. Even link me to sites. Interactive Crossword is a must.
3 days after the P.I. removed Zippy from the comics pages, Hearst announced he was selling. There is a connection. Zippy is on the grassy knoll.