The Kansas City Star announced today it is looking into the possibility of selling, then leasing back the huge $200 million printing plant it began using in 2006. The Star would retain ownership of the equipment, including its four presses. The KC Star also said it will put its downtown circulation complex on the market, and move staff to the headquarters building at 1729 Grand Blvd. in early 2009.The photo above shows the printing facility, which opened in 2006. (Photo courtesy newpressroom.com.)
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The KC Star is evidently planning to become a tenant, not an owner -- which tells you the desperate state of the KC Star.
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Bonus question: will the proceeds from the sale of these properties go back into the KC Star, or will the proceeds be used to pay corporate debt?
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5 comments:
In theory the proceeds from sales of properties would go to pay down debt because that is what is going to drive McClatchy out of business long before their stock price will.
In reality though, there are only two realistic buyers for this facility and it could prove a shrewd one in the long run, if, and only if, said prospective buyer were to be betting that McClatchy is destined for liquidation.
The presses were custom built on site. They cannot be disassembled and and moved like a press from days gone by. Also, the distribution system, insert machines the automated dock, etc are all tied into the single production line and far to expansive to be able to be relocated at the 18th and McGee site or most anywhere else.
Therefore, a company betting that McClatchy would go under could literally insure that they were the only bidder for state of the art, custom built, printing operation complete with everything needed, simply by owning the building that houses the operation.
Without that facility, the KC Star's net worth is not one single dime more than their dying subscriber list and dwindling advertisers. Everything in the old building is a liability.
Now, ask yourself, who could this possibly benefit? Only two major papers are reporting growth and profits. The Wall Street Journal and USA Today. USA Today's is it's owners only income producer pretty much cutting them off at the knees, leaving only The WSJ as a viable candidate.
The more I think of this, the better I like it. Wouldn't it be great to be rid of the Star and have a credible outlet like the WSJ with a foot print in the KC area? Or even better. The WSJ and News Corp as the owners of the KC Star!
Dream over...carry on.
Your a so correct. My dream would be that McClatchy goes under and some other paper comes to town.
Neither one of those companies are going to buy the building and let the Star own and run the presses or even be in charge of the presses. For one thing they don't pay that well. Such an interesting next few months. I' m sure they have already talked to somebody about selling or he would not of mention it in his letter.
Remember how they had to pay twice for that building because the contractor they hired for the project went bankrupt and didn't pay the workers so the Star had to pay them to remove any leins.
Now they want to sell!
The way they hired there projects was really interesting. But one should be careful about all these in life.
On or before 2012 most city newspapers will not be around. Content and advertising will be found on their web sites that newspapers will try to charge for. Web press facilities like the Star's will continue to print on a contract basis the grocery store inserts that will switch to mail delivery and maybe regional editions of the WSJ (recently announced) and USA Today.
Yes, I presently sell on line advertising but, sold advertising for the Star and other newspapers...the writing is on the wall or should I say "on the web"!
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