And the consequences of the travails experienced by the press as of late could begin to be felt locally. With the as of yet unexplained disappearance of the Mountain Views News (which has now missed its second Saturday publishing date in a row), we might very well be facing a future with no print coverage of our local news. So would it matter?
KPCC has an article up on its site reporting that things are not going so very well with the corporation that owns the Pasadena Star News. So poorly in fact that they are now filing for Chapter 11 protection.
Parent company of Pasadena Star-News to reorganize debt to stay afloat - The holding company for MediaNews Group Inc. newspapers, including The Denver Post and San Jose Mercury News, says it plans to file for Chapter 11 bankruptcy protection.
Affiliated Media Inc. said Friday it would file a "prepackaged" plan already approved by lenders, which should allow it to emerge from bankruptcy more quickly. MediaNews' management and newspaper operations, employees and vendors won't be affected by the holding company's restructuring, MediaNews Group Chairman and CEO William Dean Singleton said. He is the chairman of The Associated Press board of directors.
A date for the filing hasn't been announced, but the company said it would be in the near future. The reorganization plan was expected to be filed in federal bankruptcy court in Delaware. Under the plan, the company's debt would fall from about $930 million to $165 million. Senior lenders would swap debt for stock, the company said. The group of 116 lenders,Led by Bank of America, would hold a majority of stock but not voting control.
All very worrisome stuff to be sure. I personally have never worked in a company that filed for Chapter 11, but I have done business with quite a few that did. I am always amazed at how similar the spin can sound. And that bit about the prepackaged plan and emerging from bankruptcy more quickly is pretty standard boilerplate. I mean, what else would a bankruptcy be if not planned for? A mad rush to the door, with papers flying and employees howling in dismay? And while getting rid of debt is not necessarily the worst thing a company can do, would there have been any of that debt if the company had been profitable?
I mean, let's keep it real here.
In an article on PR Newswire ("Affiliated Media, Inc. Announces Financial Restructuring") Chairman and Chief Executive Officer for NewsMedia William Dean Singleton reveals the following:
"One critical advantage of our plan, compared with those by some other media companies, is that it is a prepackaged plan that has the approval of lenders and unlike other media filings, this one does not involve our newspaper operations." He noted that the plan allows for claims of Affiliated Media's trade creditors, suppliers and employees to be unaffected by the filing and paid in the ordinary course as they come due. Almost all of the company's trade creditors, suppliers and and employees are totally unaffected in any event since none of the individual newspaper operations are involved in the reorganization plan. "For them, it's business as usual," he said.
There is a technique often employed in bankruptcies known as "calming the herd." And the reason why pulling this off in a successful fashion is vital for the survival of an organization is because it would be impossible to do business otherwise. If those who supply newsprint, equipment, phone service, and all the normal day to day stuff a newspaper needs to function, were to decide that they didn't want to throw good money after bad, the demise of the company would be be assured. So they need to be made to feel confident that this is merely a reorganization of debt or something, that they will be paid in a timely fashion, and generally all will be well. And that debt load for Affiliated Media, by the way, is cool pre-Chapter 11 $916 million. It would take quite a few "Sit 'N Sleep" ads to cover for that one.
The other herd that always needs to be calmed is the actual employees themselves. One of the biggest assets any company can have are the people who work for it. And those who are most likely to head for the exits to look elsewhere for work, and find it, are the most valuable. Keeping the best and the brightest chipper and working busily at their desks being a key consideration for any Chief Executive. And I'm sure that the specialists who handled this bankruptcy for MediaNews made certain Singleton understands that.
Here are a couple of items from Singleton's Q & A for Employees of MediaNews Group:
What does this mean for our business? There will be no change in our daily operations. The whole point of the transaction is to let us address our balance sheet issues - simply put, too much debt for existing conditions in the industry and the broad economy - while avoiding any disruption to our daily operations.
Will there be layoffs? No. our decisions about staffing have always been - and will continue to be - in response to business conditions, not our finances. So while there is no guarantee that advertising or circulation won't deteriorate further and force us to adjust accordingly, there are no layoffs planned as a result of our financial restructuring. We're committed to maintaining the staffing we need to serve our readers and advertisers.
No layoffs planned because of the financial restructuring? No guarantee that advertising or circulation won't deteriorate further? I don't see how it could be parsed more carefully than that. Sure the ice is thin Dorothy, but whatever you do don't look behind this particular curtain.
The real tragedy here is that with fewer newspapers there would be less folks around to keep an eye on the shenanigans of the various government entities that play such an increasingly large role in our lives. Not to mention all those who do business with them. And while the Pasadena Star News can't actually lay claim to having been unceasing in its coverage of these kinds of things (often being more of an enabler than an exposer), its disappearance would be a sad thing for me at least. If only because they have been such a dependable supplier of easy targets for this blog.