Inky, DN, JRC bankrupt
Not a good time to be in newspapers.
Philadelphia Newspapers L.L.C., which owns The Inquirer, the Philadelphia Daily News, and Philly.com, filed for bankruptcy protection yesterday in a bid to restructure its $390 million in debt load.Yes, things are great.
The company, bought by a group of Philadelphia-area investors for $562 million in 2006, said the voluntary Chapter 11 filing would not interrupt its daily operations.
"This restructuring is focused solely on our debt, not our operations," chief executive officer Brian P. Tierney, who led the group that provided about $150 million of the purchase price three years ago, said in a news release.
"Our operations are sound and profitable," said Tierney, referring to operating profits before interest and certain other costs.
The Philadelphia Newspapers filing follows last month's bankruptcy filing by the Minneapolis Star Tribune. The Journal Register Co., based in Yardley and the publisher of a number of local daily and weekly newspapers, filed for bankruptcy Saturday. Just last week, the publicly traded New York Times Co. suspended its dividend to cope with the economic downturn.JRC's filing came as a surprise to exactly no one, given the company's strategy of overpaying wildly for its acquisitions, including in economically depressed areas like Michigan. I guess nobody in the executive suites in Trenton (at the time, now Yardley) bothered to watch "Roger and Me." Maybe they all thought Michael Moore was a full-of-shit radical liberal. But Moore didn't file for bankruptcy, and he's more of a journalist than any JRC executive.
JRC also adheres to the belief that a company can cut its way to profitability, and that any newsroom employee not doing the job of at least two workers is underutilized. I know this because I worked at a newspaper that JRC overpaid for and spent three years watching the company make decisions that hurt the quality of the paper, chased away readers (and, therefore, advertisers) and destroyed the morale of journalists who took pride in their work. (The fraction-of-one-percent raises didn't help morale either.) I watched as one incompetent buffoon after another from Accounting, none of whom knew jack shit about journalism, was named publisher, and experienced journalists who spent decades at the paper were passed over for the job.
But none of that mattered to JRC, because every stupid fucking thing it did saved a little bit of money in the short-term. So what if an entire Sunday edition of a community newspaper has exactly three stories about the readers' community, and two of those stories were written by a copy editor pulling double duty so the company can avoid hiring another reporter?
Penny wise, pound moronic.
"We intend to emerge from the Chapter 11 process stronger, leaner and moreWell, "stronger" doesn't mean anything in this context, so throw that word away. I don't think it's possible for the company to get much "leaner," considering that copy editors are out covering things as part of their job descriptions now and papers are sharing stories via the company's WebXchange. So what if readers in Lansdale, for example, don't buy the paper to read about what's going on out near Norristown? They'll read it and like it, right?
financially viable in the current environment. ... Our business will continue
its normal operations and we will publish content as usual throughout this
process," Chairman and Chief Executive James W. Hall said in the statement.
Um, no. They haven't, and advertisers have noticed. Circulation numbers are down and JRC's solution is to cut sales staff and raise ad rates. What advertiser with more than one brain cell is going to pay more to advertise in a paper that fewer people are reading?
So will JRC finally realize that advertisers follow the readers, like newsroom staffers have been saying for years (and publishers would have heard, if they spent any time at all in the newsroom) and invest some resources in producing a product that people might want to buy and read?
Nope. The same idiots who drove the company's stock value to below one cent per share are going to make the company "leaner." That means more layoffs, more double duty, more half measures and more comp time instead of overtime. (Hear that, Dept. of Labor?) In short, they are planning to continue the practices that led them to bankruptcy in the first place.
As part of the bankruptcy case, the company has asked for permission to pay as much as $1.7 million in bonuses to 30 top officers and key employees should the Journal Register meet certain reorganization goals, including closing more papers and eliminating more employees. The company employs about 3,500 people.As for the "more financially viable" part of Hall's delusional statement, don't count on it. Because when you dig yourself into a hole, digging faster isn't the way out.
Labels: Surging Economy