Daily newspapers The Star-Ledger and Star Tribune have many things in common. Both have rich journalistic histories that date back more than 100 years and have the highest circulation among dailies in their respective states of New Jersey and Minnesota. The two privately held papers are also bleeding money and are in crisis mode, struggling to stay alive. But that's where the similarities end.
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The owner of The Star-Ledger -- Advance Publications Inc. -- has received some concessions that may allow the broadsheet daily to avert its proposed Jan. 5 closure date. A quarter of the Ledger's nonunion full-time employees have applied for buyouts, and Donald Newhouse, president of Advance Publications, has confirmed a tentative agreement with leaders of the Newspaper and Mail Deliverers Union. The union must still ratify the deal by Oct. 7.
Newhouse said in August he would have to sell or close the newspaper if he did not receive buyouts from 200 of the company's 750 nonunion workers and receive concessions from the Newspaper and Mail Deliverers Union as well as a new agreement with its mailers union, Teamsters Local 1100. A contract was reached with the Teamsters on Sept. 22. If Newhouse gets all his concession, expected losses of between $30 million and $40 million in 2008 will certainly slow, but the future of the newspaper and the sector as a whole remains cloudy.
Meanwhile, the Star Tribune set off alarms Thursday saying it would skip a $9 million quarterly debt payment, reportedly part of $432 million in debt, it owes senior lenders as it attempts to restructure. Things have clearly deteriorated for the Star Tribune since chairman and
publisher Christopher Harte's statement in May that the company would not miss a debt payment in 2008 unless things
worsened. And things have definitely gone south.
So why is the Star Tribune in a worse position than The Star Ledger? The Minneapolis paper, unlike its New Jersey peer, is owned by private equity firm Avista Capital Partners, which acquired it in 2007 for $530 million. The heavy debt load from the leveraged buyout may be the difference between survival and failure as the economy turns toward a recession. - Gerald Magpily
See BusinessWeek article
See Dealscape: Star-Ledger obituary could be written soon
Comments
I think that because of the Wall Street mess and the slowing economy in general, several business are going to go the way of the buggy whip. Extinction.
Is this the death of lots of great newspapers? Can’t say for sure, but as the Bob Dylan song goes, “the times they are a changin”.
Retired in Ajijic, Mexico,
Joel Smith
www.CasaPreciosaAjijic.com