It's clear now that the massively indebted dead-men-walking companies want to strip down the newspapers to shells while hoping to survive the financial downturn. They're ruining newspapers and a lot of journalists' lives in the process.
... Tribune and McClatchy need to accept reality, disband, and sell all of their newspapers. It's the right thing to do, and it's just good business: These papers are losing value at a massive rate and will continue doing so as they go deeper into doomed strategies like content and beat sharing. Might as well get out now, cut their losses, and let new owners try to salvage what's left.
If McClatchy sold all its papers I doubt the proceeds would cover MNI's $2 billion debt.
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18 comments:
It won't come close to covering the debt, but nothing they do will. With revenue acting like shrink wrap the best they can do is hope that the banks will allow them to cut their worst losing propositions. Closing down properties is the next step in the death of McClatchy as a corporate entity.
It may however be delayed as smart debt holders will realize that they can minimize their losses by liquidating the McClatchy properties on their own rather than allowing McClatchy to manage the liquidation.
Finally, a voice of reason.
Like any animal, MNI helped spawn the guy in the White House. They have served their purpose and can now go die in a corner some where.
Most McClatchy newspapers would make money, or at least break even, on their own.
Countless MNI papers have said they were doing fine, only to be forced to cut people, benefits, hours and other costs because of a corporate mandate.
I think finding a buyer at this point might be difficult.
Most McClatchy newspapers would make money, or at least break even, on their own.
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That is not true. Even if the dept at McClatchy was $0.00 the overall company is losing money.
It is unrealistic to say that the individual newspapers are fine or making money. None of them would exist as stand along businesses with zero debt.
If they were spun off as seperate companies, they would be required to also take a portion of the debt.
There is no free lunch. It costs money to build and run a company. You cannot pretend that these newspapers are real companies with no debt.
My paper is making a profit, a healthy one even, just not the "cash flow" needed to satisfy Sacramento. So every month, we are forced to cut more and more, and in doing so, reducing the value of our property. There is no plan, no long-range vision, just a number to reach each month. New revenue sources are absent, so they cut more from what little there is left to cut.
A sale would be a Godsend.
Re: “My paper is making a profit”
Another individual newspaper cost to consider might be the price of newsprint and other material contracts negotiated by McClatchy on a large scale. Smaller newspapers will probably pay more for paper and ink, just for starters.
Most McClatchy newspapers would make money, or at least break even, on their own.
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Even if that were true (It isn't), it doesn't matter because you're living in a fantasy world if you think for one second that the banks would let McClatchy spin one off.
At the very best only half of MNI's holdings can squeak out a marginal profit while running on a skeleton crew. You've been listening to too much propaganda. Your paper is not sustainable period and never again will be barring nationalization.
One of the advantages of the Internet is that it brings the entire world together to share information. And so all of us from around the country are hearing the same stories. "Our paper is profitable, McClatchy is looting us to feed..." "We actually have more readers than ever before, we just can't get ad revenue." And on and on.
Personally, I don't know how The Star could be profitable having to pay for a 200 million dollar press. The debt load on that white elephant must be absolutely horrendous.
It was $199m but who is counting.
I have heard that it has been paid down to $75m but who knows. I am sure it can be verified somewhere.
It was $199m but who is counting.
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Actually it was 286 million in the end and no, it has not been paid down to 75 million. Not even close.
Even the Stockton Record has an article about her house.
Where's the Bee? Oh that's right, she's a Democrat and you don't ever go after Democrats at McClatchy. It's a company policy.
http://www.recordnet.com/apps/pbcs.dll/article?AID=/20090612/A_NEWS/90612007/-1/RSS02
You guys are full of it. My paper makes eight digits a year, and has local people who'd buy it in a heartbeat.
Getting away from the MNI looters would be a gift from heaven.
You guys are full of it. My paper makes eight digits a year, and has local people who'd buy it in a heartbeat.
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Spoken like a liberal who has never before built or run a real business.
It takes money to build a business. In this case it is called "debt". This business that you call "your paper" was built with someone else's money. That money needs to be repaid eventually.
There is no way for you to claim to be a profitable business with zero debt. The debt resides on McClatchy's books. So that money you claim McClatchy is "looting" is actually responsible for the existence of your job.
The fictional profit that you are imagining would likely be zero once the debt service is accounted for.
The liberal mentality of borrowing a bunch of money, then not paying it back, it going to destroy this country.
Anon 2:23 THE voice of reason. Thank you!
Debt doesn't set the purchase price; the market does.
Or don't you know how to buy a business?
Anon 6:20 wrote:
Debt doesn't set the purchase price; the market does.
Or don't you know how to buy a business?
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In this case with McClatchy, debt does set the price. The banks with the line of credit are owed about $1 billion (out of the $2 billion in debt). All assets of McClatchy have been pledged to secure the line of credit. So McClatchy is not allowed to sell anything without getting prior permission of the banks.
McClatchy will not be allowed to sell any assets (or individual newspapers) without getting the prior permission of their banks. The banks are not going to allow asset sales without guaranteed agreements as to how the money is used. In the past few SEC filings, this typically indicates that the debt be repaid.
McClatchy is required to use all cash flow to pay interest and pay down their line of credit.
In summary, "debt" determines EVERYTHING at McClatchy right now.
McClatchy is completely handcuffed by debt on how they operate.
Debt doesn't set the purchase price; the market does.
Or don't you know how to buy a business?
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Made you feel like an idiot didn't he? Being a smart ass and then having to eat crow.
No idea of what a debt covenant is do ya? Edgar Online is your friend. Till then, shut up because you look like an idiot.
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