Is “Do-Over” the coming strategy for newspaper companies?
For the half-dozen US newspaper companies in bankruptcy, it’s an official, court-approved do-over they are looking for, witness Brian Tierney’s effort to shed some $300 million in debt in Philly as the papers seek to emerge from court supervision. He can make the case for a fresh start, building on the pride of downsizing: “Our performance has been incredible. We have carved $95 million out of the cost structure of the paper in the past three years.” Meanwhile the Star-Tribune is about to jettison some $400 million of its half-billion-dollar debt as it emerges from bankruptcy. The bet in Minneapolis and Philly: recovering revenues may be sufficient to pay operating expenses, greatly reduced debt service and a bit of profit. It’s a strategy that that McClatchy (MNI), MediaNews and the New York Times (NYT) would love to follow as well, but they’ve all stayed out of the courts. The strategy, though, may be parallel: find some way — property sales, long-term debt restructuring, new capita
