Newspaper bailout?
Posted by Richard on December 4, 2008
A couple of weeks ago, I noted:
When you start handing out free money, expect a long line to form. Wall Street bankers and insurance companies have been joined in the bailout line by student loan debtors (and their creditors), domestic auto makers, states, municipalities, … I'm sure the line will get longer day by day.
The latest candidates for a bailout? Newspapers. They're in trouble all across the country, with waves of layoffs and seas of red ink. According to Michelle Malkin, politicians in at least one state are now talking about a government rescue plan for their struggling papers:
It was supposed to be a joke. As an endless parade of corporate beggars marches to Washington in search of handouts for their beleaguered industries, some of us in the news business snarked that journalists would be next in line. I launched a Newspaper Bailout Countdown Clock on my blog after The New York Times Company's bonds plunged into junk territory in October. A few weeks later, columnist Jon Fine published a tongue-in-cheek memo in BusinessWeek outlining a federal newspaper rescue proposal.
The jibes were meant to be facetious critiques of for-profit enterprises demanding massive taxpayer expenditures under the guise of preserving the "public interest." But now, in a rather unfunny turn, the newspaper bailout push has actually come to pass.
The Republican governor and the Democratic attorney general of Connecticut went on the record last week in support of government intervention for failing local newspapers. God save us from bipartisanship. …
I'm sure tonight there are folks at the Rocky Mountain News hoping this idea gains traction. Owner E.W. Scripps Co. put it up for sale today, and I suspect they'll have a hard time finding a buyer:
The Rocky Mountain News is on the sale block, facing an uncertain future as Colorado's oldest newspaper approaches its 150th anniversary.
The head of Cincinnati-based E.W. Scripps, the Rocky's owner, acknowledged in making the announcement Thursday that if a buyer does not step forward in the next four to six weeks that the paper could be closed — a move that could occur as soon as early 2009.
…Scripps expects the Rocky to lose $15 million this year, Boehne said.
A buyer would not only have to reverse those losses (in the face of declining ad revenue), but would be saddled with half the $130 million debt of the Denver Newspaper Agency, the production company owned jointly by the Rocky and the Denver Post.
"It's a terrible time to be trying to sell a newspaper," said Rick Edmonds, media business analyst at the Poynter Institute, a journalism think tank in St. Petersburg, Fla. "There might be some potential buyers, but they might have a hard time getting credit. A couple of years ago I would've said there was a very high chance that Media News would buy it, but they are too stretched right now."
Michael Howard, who joined the Rocky as a reporter in 1965 and served as editor of the paper from 1974 to 1980, said he doesn't "know anyone dumb enough to buy a newspaper right now."
Howard, a descendent of the Howard family that formed half of the former Scripps-Howard newspaper chain, doubted a sale would be successful. He said he believes it was "inevitable we were headed toward a one-newspaper town. It's very sad."
Maybe editor/publisher John Temple should head for Congress, hat in hand. He should probably drive there in a hybrid.
Of course, I'm not for a government bailout of the Rocky. But I've been a subscriber for over two decades, and I do think it's sad.
Anybody know Rupert Murdoch's private number?
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