PRESSED FOR CASH (Minneapolis "Red" StarTribune almost bankrupt - Dinosaur Media DeathWatch™)

New York Post ^ | May 4, 2008 | ZACHERY KOUWE

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The Minneapolis Star Tribune, reeling under a heavy debt load and plummeting advertising sales, is on the brink of bankruptcy, The Post has learned.

One of the nation's top dailies, "The Strib," as it is known to readers in the Twin Cities, recently hired the Wall Street powerhouse Blackstone Group to restructure its balance sheet after failing to meet its debt obligations, according to people familiar with the company.

The broadsheet is unlikely to shutter its doors, but its creditors, including the banking giant Credit Suisse Group, figure to eventually end up controlling the paper. Down the road, the creditor group could then sell it after dramatically cutting costs.

The private-equity firm Avista Capital Partners, run by former Credit Suisse deal maker Tom Dean, purchased the Star Tribune from the McClatchy Co. in 2006 for $530 million. The New York firm, which put up $100 million of its own money and borrowed the rest, stands to lose its entire investment, sources said.

After Avista bought the company, the firm's partner, OhSang Kwon, was quoted in the paper as saying that Minneapolis-St. Paul was a "good market" and that "this is a good time to be buying newspapers."

That sentiment turned out to be too optimistic, as newspapers nationwide continue to lose readers and advertising dollars continue to migrate online.

Last week, the paper reported that its weekday circulation dropped 6.74 percent, to 321,984, in the six-month period that ended March 31.

Billionaire real-estate mogul Sam Zell, who bought the Tribune Co. last year, was recently forced to put Long Island's Newsday, one of its more valuable assets, up for sale in order to meet debt obligations.

And the Philadelphia Inquirer and The Philadelphia Daily News, that city's two largest dailies, could meet the same fate as the Star Tribune...

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[abb]

Is this a competitor to the Pioneer Press there?

Yes, they compete for the same advertising dollars.

[Mad_Tom_Rackham]

Many papers are owned by conservative business people. The problem is that almost all of them are run by socialists and other leftist leaning anti-Americans.

If I were one of those conservative owners, I'd be kicking ass and taking names, instead of sitting on my butt watching my investment shrivel up and die.

[PapaBear3625]

I was just going to say...and “another one bites the dust”...when I read your comment. It gave me pause. You are right. If the newspapers and major media stations go down...then things will be more secretive than ever. Imagine what it would be like if no one was reporting anything - right or left-sided. Though I doubt that will happen, it would be a frightful scenerio. Thanks for giving that thought.

Looking at the trends, more and more people are getting their news from Jay Leno, Bill Maher, and Saturday Night Live

[Uncle Hal]

I wonder how long the Tribune is going to be able to keep its feet above water.

[abb]

I wonder how long the Tribune is going to be able to keep its feet above water.

If they go under you'll be able to tell when they're finished by when the bubbles stop coming up...

Seriously, I look for a bankruptcy within the next 18 months or so. The revenue declines seem to be accelerating industry wide. It's not an aberration - it's the end of the world for them.

[chainsaw]

If truth be told, it's because the COMICS section was missing and so I decided to visit FR to read some juvenile and inane comments to get my laughs. Thanks for obliging.

I guess when one asks a stupid question he gets a stupid answer. Your Welcome.

[JCG]

If enough newspapers start going belly-up, where will FR get its news to discuss?

Al Gore invented the Internet for this very purpose.



----

Send treats to the troops...
Great because you did it!
www.AnySoldier.com

[HP8753]

Couldn’t happen to a nicer group of Commie propagandists.

[nina0113]

It’s a rural community - not a lot of highspeed internet available, many people still don’t even have computers. I liberated a bunch of Pentiums (not P2s or P3s) from the dumpster at my office and gave them away to a rebuilder ho was thrilled to get them just a couple of years ago.

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http://www.startribune.com/business/18565504.html

Star Tribune hires Blackstone Group to analyze its finances

By MATT McKINNEY, Star Tribune

May 4, 2008

Faced with sliding advertising revenue amid a continuing slowdown of the newspaper industry, the Star Tribune said Sunday that it has hired an adviser to evaluate its finances.

The hiring of the Blackstone Group, a New York private equity firm, comes as the Star Tribune struggles to make debt payments under loan terms struck slightly more than a year ago, when projections showed the newspaper making more money than it is today.

The Blackstone announcement came after a Sunday story in the New York Post said the newspaper had failed to meet its debt obligations and was near bankruptcy.

Star Tribune publisher and chairman Christopher Harte said the Star Tribune has not filed for bankruptcy, nor is it about to.

“The Star Tribune currently has sufficient liquidity and is current on all its debt payment obligations,” Harte said in a statement issued Sunday afternoon. Pressed further, he said the newspaper would not miss a debt payment this year unless things worsened.

Harte said he is in frequent contact with lenders, including Credit Suisse. None of them wants to take over the newspaper, he added.

Such a takeover could be a possible outcome of a bankruptcy filing. “Credit Suisse and the other lenders absolutely do not want to run the newspaper,” Harte said in an interview Sunday evening.

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http://blogs.citypages.com/blotter/2008/05/strib_bankruptc.php

BREAKING: Strib Bankruptcy Article Fallout — Who is the Blackstone Group?
Filed under: Media

The latest on the Star Tribune bankruptcy rumor

http://www.minnpost.com/davidbrauer/2008/05/04/1732/strib_on_verge_of_bankruptcy_ny_post_reports

UPDATED: Strib bust? Local paper denies the juiciest parts of bankruptcy report