Monday, January 18, 2010

Corporation Owning Pasadena Star News Files For Chapter 11

Things aren't going so very well in the rag trade lately. Of course, things aren't going so well in the real estate, automotive, retail, banking, building, or many other trades, either. A sign of the times, I guess.

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.

39 comments:

  1. How come there isn't anything about this on the
    Star News website?

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  2. They deserve it for the way they have been maligning the PUSD all these years.

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  3. Maybe Sir Eric can interview Larry Wilson at Beantown.
    Or even better maybe Sharon Pevsner (stroller mom
    organizer against smoking at sidewalk cafes) would put on her reporter hat and ask Larry why he is against/obsessed with stroller moms?

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  4. I could go on (and on and on) about this paper and the yellow journalism they have been printing, for years and years. Not only that, the sheer bullying they have openly performed, the alignment with causes that harm the city whose name they bear.

    But let me just say for now, that Pasadena needs an ethical press. A press that is not ethical harms a city, in more ways than many people realize, and stymies its productive growth. Lets move forward into an era of media that is democratic and serves the citizens of Pasadena.

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  5. Good news for us Tree Lovers and for the Trees,I may add...now if we could stopped building houses!!!

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  6. I wonder where Larry Wilson would land? He could write a column for Susan Henderson I guess. That is if he would agree not to write about anything too local. We all know who that privilege belongs to...

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  7. The Tattler is one of the few news sources that is credible nowadays.

    I hope Sir Eric will still be able to provide us with important local and state news after John Crawford is elected to the city council.

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  8. Speaking of Susan Henderson, I still haven't seen the paper that was supposed to be out last week on the racks. Is she going to skip a week?

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  9. Last week has already been skipped. Looks like she's now going for 2. And if that turns out to be the case the City Council needs to find another place to put legal notices.

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  10. My theory? Henderson is saving her last $$ to be able to publish during the election period. I'm sure some of the candidates will have money to spend for ads.

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  11. Maybe. But it will be her last money because the legal ads
    will be long gone.

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  12. Susan is out of compliance with her contract....she needs to lose the legal ads.

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  13. Anybody got some extra time to call up all the people who advertize or have paid for legal notices in the Henderson non-newspaper and ask them why their announcements were missing this past week?

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  14. A world without the Star News and Mtn Views News. Where will the dirts go to lie?

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  15. They will try to lie through the people they try to elect on the City Council.

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  16. It's time for the other Council Memners to join in Kurt Zimmernan's demand for Susan Henderson's list of subscribers and records showing just how many times she missed her Satueday publication deadline

    If the subscription list is too small and the paper is being published at irregular intervals, the Council should vote to have the City Attorney file an application to have the paper stripped of its adjudciated status.

    The City can publish its legal notices in other papers.

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  17. Absolutely right, 11:38

    Our city money should not be going to this woman.

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  18. Here's a rhetorical question. Why would the Chamber of Commerce elect someone to its Board of Directors who was recently been cited by a Court for "misappropriation" (you know what that is a nice word for) of property? And ordered by that Court to pay $40,000+ for doing so? Doesn't that kind of give the impression that the SMCOC has the ethical values of a cistern?

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  19. An interesting future discussion would be, where do we go from here? Whats next, after the demise of Print media? Will our media become more democratic, or less? How will injustices be reported on? What is the future of Media in the San Gabriel Valley?

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  20. Maybe you should start a blog to discuss pasadena media.

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  21. Looks like we're down to the Sierra Madre
    Weekly. Which is from Monrovia.

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  22. Ah not to worry sir eric, it is a huge corporation, I saw the story in the New York times, the other day, the closing of tavern on the green caused more pain than the idea of a news organization doing a chapter 11 bankruptcy, because from the head they censor, and it seems like all of the branches are of one mind and opinion. Besides it is easier for us to go online than buy the papers. That is a huge downsize and yes corporations are cruel, to their employees.

    But lately the only truth in the news is what I read here, and sir eric that is saying something. You are great...

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  23. to Anonymous 9:28: if only the Pasadena blogsphere weren't infested by trolls. I don't have the strength of Sir Eric to wade through their hostile comments, and commenting is so important on a blog! They are what makes a blog such a democratic media format. Here is another question, how do we combat the trolling problem in our local media? How do we make it safe for people to open up new blogs here? We need them now, more than ever, it is so important to get the truth out!

    "Our lives begin to end the day we become silent about things that matter" - Martin Luther King

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  24. Accuracy and transparency in reporting needs to be paid for. Journalism is a profession, has standards of objectivity and fact-finding that bloggers are generally not up to. Myself included, I don't have the investigative sources, editorial oversight or manpower that most newsrooms do (or used to).

    I'm deeply concerned by this evolution in the media, it seems to be losing accountability and devolving to the lowest common denominator of opinion-mongering. This feeds all this partisanship that's poisoning public debate on issues, as well as providing just a very shallow well of factual information on issues.

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  25. THE CITY NEEDS TO STOP SUBSIDIZING THE CHAMBER OF COMMERCE.

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  26. Sierra Madre business ownerJanuary 18, 2010 at 2:23 PM

    Surely Mr. Singleton misstated when he wrote, "our decisions about staffing have always been - and will continue to be - in response to business conditions, not our finances."
    Their finances are not a business condition?

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  27. Laurie Barlow

    you make a good point, but I fear the high tech information age is going to make old time newspapers, a thing of the past.

    With Twitter, Facebook, all the blogs, it just will be what we fear, seems a high price to pay for the internet. However, it is what it is.
    SIGH

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  28. I hope everyone there is ok and that you are spared mudslides.

    Off topic but sincere.

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  29. Also off topic, did anybody see the dirt rivers flowing down Baldwin, heading for the storm drains just south of St. Rita's?
    Must be the Carter developers sharing dirt with their southern neighbors.

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  30. just the other day mrs. old kentucky fan and i were laying in bed wondering what it would take to get that name dropping boob larry wilson out of our lives. and now this. they ought to reorg larry right into retirement!

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  31. 2:10 What is it with the City backing the C of C? It is obvious they have ignored the TRUTH with the courts regarding Susan and now elected her as a peron to look up to as a role model. Will she be the person to help lead Joe and Josh? oh dear me....someone explain the reason and logic.

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  32. Dear Laurie Barlow:
    According to the polls, more people watch tv than read. More people believe simple sentences than complex compound sentences. More people want a simple easy answer to problems and only understand/hear half of what they read/hear.More people want emotional appeal than rational thinking. And, finally, the kicker, most people blame others than take on personal responsibility.To add to this, just watch the WWB once and see that the sponsors are video games, Bowflex, and fatty foods. Who cares about anyone else or the ethics of Journalism? It has already stooped to the lowest common denominator of talking heads making their opinions facts. It is scarry. Sir Eric tells us the truth about our town. We are all very blessed. When he wins the election, we may loose the Tattler. Too bad the cost of print is overpriced. Too bad the price of truth is high.

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  33. Great observations, 6:40, but it begs the question, has it been always so?
    Is there a real deterioration of human being-ness, or is it just what most of humanity has always done/been, but now there's more of a spotlight on it, because there's more of a real time spotlight available?
    There have also always been voices like L. Barlow's, calling us to better things.

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  34. Jake: we have to continue to care about the ethics of journalism, even though you are right, so much of our Media is in a mess. We need Someone to tell us the truth, and that is why we need more blogs like the Tattler around. We also need reformed media, and Laurie Barlow is right, good reporting needs to be paid for. And to maybe?: I think there has been a deterioration of media and a deterioration of ethics, and I think the two go hand-in-hand. Honest media points us in the right direction, it calls attention to injustices, it mobilizes people. Honest, democratic media, is what we need so badly right now.

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  35. I agree and applaud you two. Thanks

    Humanity discovered TELEVISION and plopped their children in front believing falsely it was OK. It is a drug for all of us. The spot light used to ve on an education and advancing your mind and expanding yourself culturally by playing an instrument of taking an art class. Visiting a library was a weekly event. Now the aim is to get money fast and quick and walk over anyone to do it. And it is admitted on the airwaves....It is subconsciously approved when you listen to the poor speech and horrible rhetoric of some talking heads.

    Americans have lost a sense of decorum and just plain simple manners. Yet, few children even know that there is a difference. Look how many young children are incarcerated. Yes, I believe our society has changed because role models are on television, music videos and often only at school for our youth. The death of the newspapers will be a tragedy for our culture. With all the lies, we can read many to gather the truth. I still applaud Ethical Sir Eric and those like him.

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  36. You are dead-on, Jake, television is implanting false morals on our children, and what about the advertising? Advertisers have no problem with seeing kids as just another consumer to sell their products to. Sold-out networks do the same thing to adults, both in their programming and in their advertising. Much of our main-stream press is no better and has manipulated its readers with hidden agendas.

    We are lost for the lack of the truth in our Media, and then we wonder why our society has grown so out of control, why there is so much corruption everywhere, why our politicians act for interests other than the people who elect them.

    I would ask here also, why has the media been allowed to grow so corrupt? Why haven't our elected officials taken an interest in whats happening with this essential communicator?

    There is only so much a blog can do, although the Tattler has moved mountains, and proven just how effective honest media can be.

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  37. To commentators on my post, thanks for the discussion. It's important. What I see, as a "technology person" is that the conduit of information is shifting to digital streams, which is OK except that the models for revenue and accountability have fallen apart. They will have to be restructured. This is a painful transition.

    I'm just trying to say that it's important not to let the lowest common denominator of cost decimate the fourth estate, so fundamentally needed as a "check and balance" to our constitutional republic form of government that is implemented via the democratic process. The tripartite structure of our governance: House, Senate and Administration, built upon our revolutionary history of "rights of man" is under incredible stress due to cultural shifts and government and corporate "double-talk". Orwellian.

    I don't want to see lowest common denominator and corporate "spin" to take over what was once the premier leadership for real freedom of thought and rational process. Maybe that's just the "fate of empire", a sequence that's unavoidable in human cultures.

    I posted about this subject here
    http://greenswardcivitas.blogspot.com/2009/12/message-of-hope-for-new-decade.html

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  38. For further insight into the press and it's intertwining with corporatocracy please read "Manufacturing Consent" by Edward S. Hermann and Noam Chomsky, none of this surprises me and it will continue.

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  39. As long as our economic model is based on consumption, nothing of substance will change, sure every four years we rearrange the deck chairs on the Titanic but until you plug the hole, nothing will change. People these days go on and on about creating jobs,jobs,jobs,jobs well I beg one question....doing what?? Our manufacturing base has been decimated, the middle class is disappearing, war profiteering is at an all time high, oops, my bad, that's one growth industry doing very well, any answers or suggestions..I'm all ears!

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