This will be the first of many terrible years for newspapers

There are no longer any suckers left with deep pockets and the desire to buy newspapers even at fire sale prices.

Last week, Hearst CEO Victor Ganzi abruptly resigned, citing “irreconcilable policy differences” over the future direction of the company.
What does he mean by that? Usually executives say “I’m taking time off to spend with my family…”
The New York Times and Business Week reported that the reason for Ganzi to leave a multi-million dollar-a -year, ivory tower position was recent investments and dismal returns in newspapers. He made some bad decisions.
Fortune and Portfolio said no, that was just an obvious-suspect guess and that the conflict was really over something else. Yeah, right.  Becuase Hillary was out of the race, perhaps?
Hearst made its last big newspaper acquisition in November 2007, buying the Tribune’s (former Times-Mirror) dailies in the well-heeled Connecticut suburbs of Greenwich and Stamford. Hearst has also signed on to numerous joint ventures with Dean Singleton’s MediaNews (bottom feeders), bought an interest in the company and thus has been poised to take over, should Singleton falter under its heavy debt load. That would be like owning the rights to own Enron in 2006.
This has been the longest, most grueling month for newspapers. Advertising reveue continues to fall like a brick thrown out of the new Hearst building. The editors need to fire the “business side” and get things turned around. That’s the ticket.
How about editors delivering the paper before they come to work in the morning?
A not uncommon position taken by executive editors
The editors may be finding out that their ivory tower positions of filtering only the news that fits their liberal agenda is not viable any more. Each exectutive editor may want to pull their head out of their ass and look around at the massive layoffs.

2 thoughts on “This will be the first of many terrible years for newspapers

  1. I’m old enough to appreciate that the necessity of paper documents to transfer information have seen it’s day.

    When the amalgation of entertainment and news occured in the 70’s, and the dumbing down of public school standards, losing the informed citizen became a problem. Passively watching what has become network propoganda now passes for educating the public about current events… so sad.

  2. The once, strongest newspapers in the country are on mat and down for the count.

    The Los Angeles Times and Chicago Tribune controlling investor Sam Zell may be unable to stop the loss of advertising revenue leading him and other U.S. newspaper publishers closer to default on billions of dollars in debt.

    Zell’s Tribune Co., (a new media company formed by the collapse of Times-Mirror and the Chicago Tribune chains), could face default by the end of the year, Standard & Poor’s analyst Emile Courtney said on June 13 in New York. “In the absence of additional asset sales, we think that it’s a possibility as early as December,” Courtney said in a telephone interview, reported Bloomberg.

    Tribune may not be able to generate enough cash to meet the terms of loans that financed its Dec. 20 leveraged buyout, Courtney said. Gimme Credit LLC on June 6 called the debt situation “deteriorating.” It recommends selling Tribune bonds.

    Industry print advertising sales suffered the biggest drop in at least 37 years in the first quarter, the eighth straight decline, as reported by the Newspaper Association of America.

    Newspaper companies in danger of default include William Dean Singleton’s MediaNews Group Inc., publisher of the San Jose Mercury News; Journal Register Co., the New Haven Register owner; and Florida Times-Union parent Morris Publishing Group, according to S&P’s Courtney.

    Insufficient Cash Flow

    Philadelphia Media Holdings LLC, the publisher of the Pulitzer Prize-winning Philadelphia Inquirer, defaulted on $85 million of its debt when it failed to maintain sufficient cash levels to comply with loan agreements, S&P reported on June 5.

    Failure to generate adequate cash may ultimately push some newspaper companies into bankruptcy, said Mark Young, president of Grist Mill Advisors, an investment bank in South Natick, Massachusetts, that specializes in media deals.

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