A trio of bankrupt newspaper companies share the honor for contrarian-bets-gone-bust.

Ambitious owners of the Chicago Tribune and the Los Angeles Times, the Star Tribune in Minneapolis and the Philadelphia Inquirer and the Philadelphia Daily News sought to defy predictions of newspapers' demise but ultimately had to seek Chapter 11 protection instead.

It was quite a comedown for some big players. Tribune Co. entered bankruptcy in December, less than a year after real estate magnate Sam Zell closed the company's $8.2 billion take-private, financed with an employee stock ownership plan.

The colorful and often vulgar Zell was the most outspoken of the new owners. The self-described "grave dancer" completed what he called "the transaction from hell" in December 2007. Regarding the fate of newspapers, he reassured staffers at the time, "They ain't ended, and they're not going to end."

Star Tribune, which Avista Capital Partners purchased from McClatchy Co. for $530 million in March 2006, followed Tribune into bankruptcy this past January.

The publisher of the Philadelphia Inquirer and Daily News, Philadelphia Newspapers LLC, filed in February. Hometown owners, including ad man Brian Tierney and homebuilder Bruce Toll, paid McClatchy $562 million for Philly's largest papers in June 2006.

Many publishers took the view that their papers' community ties would provide an edge against bloggers and online competitors that could not match the resources of a big-city newsroom.

In Philadelphia, the Inquirer and the Daily News used the tag line "bringing home the News" to herald a new era at the two publications, which had not been owned locally since 1969, when Walter Annenberg sold the papers to Knight Newspapers Inc. Star Tribune chairman and publisher Chris Harte touted the papers' "excellent local product" and knowledge of "what their readers want."

But for some papers, local roots were not strong enough to withstand the devastating crash in newspaper advertising Internet competition brought on, particularly after the Wall Street implosion in fall 2008. Publishers have had to address the costs of reporting, printing and delivering a newspaper seven days a week while continuing to report, print and deliver a newspaper seven days a week. There are no reruns at a daily paper.

Tribune would not comment on its reorganization or future ownership structure, including the fate of the employee-owned shares. While Zell's stewardship of Tribune caused unrest in many newsrooms, the company's reorganization has been eerily quiet. A dispute over television rights to the character of Dick Tracy with Warren Beatty, who played the Chicago cartoon detective in the 1990 film, is one of the few juicy, ongoing conflicts.

Star Tribune's reorganization plan leaves nothing for Avista. With much of its debt swapped for equity and many of its union deals reworked, Harte said in a memo to employees that the paper would be "much more ready for the intense competition in a rapidly evolving news and information industry."

Bankruptcy hasn't extinguished the optimism about the local papers in Philadelphia, at least not completely.

The company is finalizing a $50 million new equity investment that will be a centerpiece of the publisher's to-be-filed reorganization plan. "Our view is that there isn't any other newspaper in the country that we're aware of that is raising new cap and new equity money," says Philadelphia Newspapers spokesman Jay Devine. "We believe the reason we are able to do that is because of the hometown nature of the ownership group here in Philadelphia."

Some of the new money is coming from members of the 2006 buyout group. "Many of the original investors are interested in reinvesting in the papers because they are members of this community," Devine says. "They know the papers. They know our Web sites. That gives them greater trust and confidence in these products."

Zell was partly correct. While some have cut back print editions or shut down entirely, newspapers in general "ain't ended." Long-held ideas about how much debt they can carry, and how big a dividend they can pay, have.

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