Whooooosh
By Mitch Berg
Strib files for bankruptcy:
The filing comes less than two years after Avista Capital Partners, a private equity group, purchased the paper for $530 million.
It was widely expected after the paper missed multiple payments to its lenders. The Star Tribune in its filing lists assets of $493.2 million and liabilities of $661.1 million.
The news was first reported on the Star Tribune’s Web site and confirmed by publisher Chris Harte.
In a statement, Mr. Harte said, “We intend to use the Chapter 11 process to make this great Twin Cities institution stronger, leaner and more efficient.”
It could, at least in the short term, do just that.
In the longer run? Hard to say. More on Monday.
Speaking of the long run: The newsroom union doesn’t think in it:
In response to the filing, the guild representing the paper’s newsroom employees issued a statement in which it criticized Avista for its management of the paper in the wake of a series of concessions by the union.
“It’s unfortunate that a New York-based private equity company has put the Twin Cities largest source of news and information at risk,” said Graydon Royce, co-chair of the Star Tribune unit of the guild.
Well, to be fair, even a Minneapolis-based family business would have had a tough time making a go of the Strib in this market.
So what can the Strib spin off to make money?:
- Make it official: Sell the Minnesota Poll to the Minnesoros “Independent”, forming an all-lefty-propaganda mill.
- Spin off the sports section.
- And Vita.Mn.
- Sell tickets for the chance to pelt Chris Riemenschneider wtih rocks and garbage.
The Strib’s lawyers will no doubt appreciate more ideas; please submit below.
And let’s not indulge in too much schadenfreud: there are quite a few good people at the Strib. While the paper’s editorial fealty to the loony left – via Nick Coleman, Lori Sturdevant, the “Minnesota Poll” and a million puzzlingly-daft editorial stances – were a few extra barnacles on the anchor that sank the paper, I don’t wish unemployment on anyone.
January 16th, 2009 at 7:57 am
The Star Tribune in its filing lists assets of $493.2 million…
which is almost the market value of the 4 city blocks of land surrounding 425 Portland that Z. Wilf was in negotiations to purchase from Avista last year. Once that land is gone the Strib has no other significant assets.
January 16th, 2009 at 8:15 am
But if you went to their web site last night, the first thing that pops on your screen is a Bush-bashing/belittling cartoon. Even in bankruptcy, they keep up the political agenda.
January 16th, 2009 at 8:51 am
[…] Looks like Avista has done a bang-up job in running this newspaper. The unions agree (via Mitch): In response to the filing, the guild representing the paper’s newsroom employees issued a statement in which it criticized Avista for its management of the paper in the wake of a series of concessions by the union. […]
January 16th, 2009 at 12:15 pm
The schadenfreude is understandable; the Strib is such a kneejerk lefty rag that occasions of centrist sanity — say, endorsing the flawed Coleman instead of Al the Clown — are seized upon by the local loonie left as rare, and therefore punishable, diversions from the shining path (so to speak).
But . . . the Strib actually makes a fair amount of money; the trouble is that it’s mortgaged so heavily that it would have to make a whole pantsfull more in order to be healthy, and that’s not going to happen; things are only going to get worse. That wouldn’t happen even with fairer reporting, not in this age.
And, yeah, their major asset is the land. This isn’t exactly a delightful time to be shopping that around.
January 16th, 2009 at 12:59 pm
Aside from Lileks, there’s no reason ever to look at that rag.
Chapter 11 is too good for them. Liquidate.
January 16th, 2009 at 1:08 pm
Who says market forces do not work? I’ll at least give them this – they did not whine for a bailout and took the honorable way out.
January 16th, 2009 at 2:22 pm
they did not whine for a bailout and took the honorable way out.
Avista forgot to rename it “Bank of Star Tribune”; a strategic error.
I agree, though — schadenfreude isn’t warranted here. The world has changed and newspapers are in a tough place right now. While I dislike the Strib’s editorial positions as much as anyone, it’s the lack of ad revenue that’s killing these guys, especially classified ad revenue.
• Think back about what the Strib looked like even five years ago. Every Thursday, Saturday and Sunday they had massive, profitable real estate sections filled with pictures of homes. Realtors now have their own websites and the real estate sections are maybe 25% of what they used to be. Home sales are down, too, but even when the market picks up it’s unlikely that the Strib will benefit. I can get the entire MLS with a few clicks if I want it – no need for the Strib.
• The Strib ran massive car sections on the weekends. Those are still there, but highly truncated, since dealers can put their vehicles on their own websites, AutoTrader, CarSoup and similar websites for far less, and no one is buying cars anyway right now.
• The classfied ad sections would often be 60-70 pages on Sunday. They’ve lost that business to Craigslist and other such competitors.
The Strib could get rid of Sack, Sturdevant, Nick Coleman and the rest of the gaggle tomorrow and those fundamentals wouldn’t change. All it would be is an act of hygiene.
January 16th, 2009 at 2:52 pm
…and those fundamentals wouldn’t change.
True, but they might stand a chance of recovering a larger set of readers. Unfortunately I saw them for the first time in decades about 8 years ago and they went from a fond memory to something abhorrent.
I don’t mind bias on the editorial page. That’s expected. It was what they were doing with their reporting that repulsed me.
Still, you do have to feel for the folks involved. They have some good reporters who play it straight, but they’ve got more than their share of folks who hook it. The shame is that the editors don’t reign in bad ones (presumably because they agreed with the reporter’s bias), and now they’re all suffering for it.
And as I said yesterday, their business office and business management is up to GM’s standards, not that they should be proud of that. But when you’re a weak, declining and poorly managed business you’re prey, not the hunter.
January 16th, 2009 at 10:41 pm
Newspapers are hurting because the people who used to read them now have a better option they can get all the news online.
The Red Star might survive in the short run, but eventually printed newspapers are going the way of the telegraph.