Monday, December 08, 2008

All The Bricks Fit To Leverage

They might as well do it.

That being, in the weeks, to months, ahead, we may see a row of newspaper publishers sitting in front of a Congressional committee, hat-in-hand, asking for a bailout.

Presumably, they will have read their own papers in making their travel arrangements to the Capital, eschewing winging in on any private, corporate jets they may happen to own.

While rumors swirled this morning, about another, the New York Times announced that they would be mortgaging their crib to rake in some much-need operating cash.

Times Co. to Borrow Against Building

The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.

The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company’s worsening finances. Analysts have said for months that selling or borrowing against assets would be the company’s best option for averting a cash flow problem next year.
Then, this afternoon, the other shoe dropped;

Tribune Co. files for Chapter 11 bankruptcy protection

The Tribune Company, owns, among other things, The Chicago Tribune, The Los Angeles Times, KTLA Channel 5, numerous other daily papers and the Chicago Cubs (which will not be part of the bankruptcy filing).

While the Tribune's troubles may have as much to do with their owner, real estate magnet Sam Zell, who loaded the company with debt, as much as it does with the growing trend of the state of the dying newspaper business.
But they parallel troubles afflicting many other newspaper and broadcasting companies nationwide: In recent weeks, the McClatchy newspaper chain put its Miami Herald up for sale, the Christian Science Monitor said it would abandon daily print publication in favor of Web operation, the Philadelphia Inquirer and Minneapolis Star-Tribune have flirted with or entered default, and the New York Times said it would mortgage its headquarters skyscraper in midtown Manhattan to help cover operating costs.

Robert Stein, over on Connecting.The.Dots, looked at the troubles through the prism of media and knowledge, versus big business;

"If I had to choose," Thomas Jefferson famously said, "between government without newspapers, and newspapers without government, I wouldn't hesitate to choose the latter."
Some bloggers who hate the MSM will no doubt show little more sympathy for newspaper makers than the most of the public does for the car industry. Yet their downfall threatens us all in an age when we are awash in tip-of-the-iceberg news, while fewer and fewer journalists are helping us see what's going on under the surface.

As we are threatened with drowning in repetitious cable TV and online headline-chasing and opinionizing, we learn less and less about hard news that might help us with the informed consent that Jefferson wanted us to have and depend more and more on the government he did not trust in its absence,

As far back as 1922, in "Public Opinion," Walter Lippmann pointed out that "the citizen will pay for his telephone, his railroad rides, his motor car, his entertainment. But he does not pay openly for his news,"

Hitting the delete button, or copy-and-pasting just doesn't have the same, gritty feel.

We may soon hear the dirty, ink-stained, fading, echoing sound of "Get me rewrite!", before too long, for the last time.

The greatest classic dialogues: "His girl Friday" (1940)

Bonus "Get Me Rewrite" Riffs

Henry Blodget: Tribune (Almost) Toast, New York Times Next?*

Barbara Kiviat: How badly did Sam Zell stick it to Tribune Co. employees?

Deb Cupples: Tribune Company Actually Has Filed for Bankruptcy Protection

Editor & Publisher: UPDATED: Black Monday -- Tribune Co. Files for Bankruptcy

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