Bankruptcy

Bankruptcy is .

the bankruptcy court can assist the debtor in restructuring his debts into more manageable obligations,
discharge the debtor from personal liability on some obligations, or even order the sale of assets to help
creditors recover money owed to them. Debtors typically avail themselves of bankruptcy only when they
find themselves in dire financial situations. Accordingly, bankruptcy is a serious situation that no
individual should enter into lightly

International Scene:

 Printed daily newspaper circulation (as reported by the NAA) hit a peak

of 63,340,000 in 1984 (having been virtually flat for the previous 10
years), and has since declined to 50,742,000 in 2007.  (Undoubtedly, the
2008 level will be reported under 50 million.)

 Like the railroads of yore, newspapers are challenged from multiple

sides by disruptive innovations, as well as by a long demographic shift
away from printed news consumption that has raised the age of the
median printed newspaper reader to nearly 60.

 Newspaper print advertising revenue, in actual dollars (no inflation

adjustment), hit a peak of $48.67 billion in 2000.  For 2007 revenue was
down to $42.21 billion, and when 2008 is reported (any day now), the
figure will be about $35 billion.

 Online advertising at newspaper sites has grown from $1.22 billion in

2003 (the first year reported by NAA) to $3.17 billion in 2007.  It will
come in roughly unchanged in 2008.  However, (a) online revenues
include a questionable level of forced “upsells” from print, and (b) online
revenues don’t cover the cost of online operations. And what really points
to their insignificance is the fact that Google’s 2008 online ad
revenue topped  $21 billion and grew 29 percent over 2007.

 The ad numbers appear bad enough viewed in those terms, but a more
realistic measure is to look at the newspaper industry’s share of total
advertising dollars, over time, across all media.  This eliminates the effect
of inflation and puts the numbers in context.  I can’t find numbers prior to
1948, but it seems likely that newspapers hit their share of market peak
 around 1920 just as rail travel did.  In my previously published
chart showing share of total advertising for individual media, newspapers
owned 37 percent of total ad dollars in 1948 and have fallen steadily ever
since, sliding at 15 percent in 2007, with an accelerating drop in the last
few years.

(https://www.niemanlab.org/2009/02/bankruptcies-what-kind-of-changes-will-they-force-on-
newspapers/)

In the U.S., weekday print circulation has shrunk from a high

of nearly 60 million in 1994 to 35 million for combined print and
digital circulation today — 24 years of decline. Advertising revenue
has cratered, falling from $65 billion in 2000 to less than $19
billion in 2016. Newsroom employment fell nearly 40
percent between 1994 and 2014.

Solutions:

 Consolidation at a corporate level. There may not be many more

economies of scale to be had by combining multiple newspaper companies
into a single entity, but some savings are better than no savings.  A large
consolidated entity with a new vision might attract new investment.  The
downside, of course, is that big corporations will get even bigger, more
inflexible, and further removed from local realities.

 Consolidation at the city and regional level. As we’re seeing in

Denver and Seattle, fewer areas will sustain multiple newspapers.  Given
the economic climate, antitrust issues are unlikely to get in the way of fully
combined operations and publications to replace JOAs or competing
papers.  This has its downside also, but it’s probably the most inevitable
development.

 An accelerated move to online-first (and only-only in some

instances).  When big-box store chains go bankrupt and avoid liquidation,
they generally shed a slew of unprofitable locations.  Rather than
locations, newspapers should shed unprofitable days.  In many markets, a
good hard strategic analysis would result not just in trimming a day or
two, but in an online-first news organization publishing in print only once
 or twice a week.  To me, this actually would be the most promising
development that could emerge. You can read some of my previous
elaborations on this topic:  “The bottom line: how it fares when you nuke
your newspaper“; see also here and here.

 Vertical de-layering. This would be a natural consequence of any

newspaper firm that truly decided to focus on being a digital enterprise.  A
delayered organization would keep the capacity to generate content and to
sell advertising, and would let someone else own their buildings, their
presses and their distribution organizations.

 Merge or collaborate with other local media.  I’ve pointed

out that once a paper decides to publish less than four days a week, it can
bypass the cross-ownership rules and get in bed with local TV and radio
stations.  The opportunities for content sharing, cross-selling and
administrative efficiencies are huge.  There would be endless
handwringing about the need to maintain multiple independent points of
view, but the reality is that there are more “voices” in any market today
than ever before, and anyone can launch a new one on their proverbial
kitchen table.

(https://www.niemanlab.org/2009/02/bankruptcies-what-kind-of-changes-will-they-force-on-
newspapers/)

This future of the newspaper business would serve as a corrective, returning the industry to its
distant past. In Tim Wu’s The Attention Merchants, he tells the story of the dawn of newspaper
advertising. In the 1830s, the largest newspaper in New York City had a circulation of only
2,600, at a price of 6 cents, making it a luxury product for its time. Benjamin Day, a 23-year-old
print shop owner, had the ingenious idea to sell a paper for a penny. That cent wouldn’t cover
the cost of journalism and printing, but that was alright, because Day’s decided he would use the
low price to attract an audience of readers that could be converted into a salable audience for
advertisers. The customers were the product. His paper, the New York Sun, first appeared on
September 3, 1833. Within two years, it had nearly 20,000 readers, the most of any paper in the
city. Day “decisively demonstrated that a business could be founded on the resale of human
attention,” Wu wrote.

The emerging business models of the Times and the Wall Street Journal are slowly traveling
back in time to recover the subscription-first model that dominated the industry before the
1830s—with one important catch. The 1830s were a heyday of local papers; without the advent
of telegraphs or telephones, news didn't travel well. But today it’s local news organizations that
are suffering the most. “People in Cleveland and Dallas and San Diego have not only stopped
subscribing to their local newspapers but in many cases are reading the websites of national
news organizations instead of the website of their local paper," wrote Timothy Lee at Vox, one of
the foremost news sites he’s talking about.
 (https://www.theatlantic.com/business/archive/2016/11/the-print-apocalypse-and-how-to-survive-
it/506429/)

But Martin Langeveld, who spent 13 years as a publisher in

MediaNews Group from 1995 to 2008, thinks the executives need to
do more than rely on Bank of America's lending plan to break free
from bankruptcy. Executives will have to reinvent the company as a
digital enterprise. 

In a post today on Nieman Journalism Lab, Langeveld looks at how

the company dug its own grave through cost-cutting decisions.

In an earlier post, he outlined a plan to get it back into shape:

In my mind, rather than trying to sell individual newspaper properties

at fire sale prices (which might get the banks 10 or 20 cents on the
dollar), the company should slice itself into horizontal business units,
which would raise cash while creating a truly digital enterprise capable
of moving forward and paying off a discounted level of debt.  Here’s
what the restructuring would entail:

 A sale of the company’s printing plants, packaged with its

considerable commercial printing customer base.  Some of this
infrastructure is aging, but the company has built some state-of-the-
art plants in recent years.  These assets would be attractive to various
regional printers looking to expand.
 A sale of all other real estate, perhaps with partial leasebacks. 
The core digital enterprise to be retained won’t need all that office
space.
 A sale of all non-newspaper assets, like its Anchorage TV station
and Texas radio stations.
 A restructuring of the remaining business as a fully digital,
online-first news organization operating in all of the company’s
existing markets, with strategic options to expand into neighboring
markets.
 A separation, Cedar-Rapids style, of the content creators and
online editors from the print product creators.  (As Gazette
Communications is discovering, this is a monumental culture shift,
but an essential one for every news enterprise to get through.)
 A reduction of publishing schedules in all markets to one or two
days per week.  Most of the advertising currently spread across six or
seven publishing days can be nudged into one or two editions that are
profitable.  In the status quo, even the profitable newspapers are
losing money several days a week — something that’s not often
analyzed or monitored.
 A five-day commuter-style tabloid in selected markets like
Denver, the Bay Area and Salt Lake City.
 A slew of niche publications with both original and repurposed
content.
 Exploration of opportunities for paid online content, not for the
core news content now being published, but for new high-value
content areas that can be developed out of the new content creation
group.
(https://www.businessinsider.com/how-to-revive-a-bankrupt-newspaper-company-2010-1)