According to The Wall Street Journal, "Two major newspapers publishers are taking steps to outsource international coverage, as falling revenue is causing more U.S. papers to shrink their foreign and national footprint." The Tribune Company, now in bankruptcy, and The New York Daily News, which is not part of any chain, may end up closing any offices they have outside the US.

Many US newspapers get most of their national news from agencies like the AP. What does that leave?

It leaves a great deal actually, and what it leaves is the key to the survival of newspaper--local coverage. Consumers can get international and national news from hundreds of websites from CNN to USA Today.com. But, what they cannot get is what is going on in the paper's hometown. And, that is often the most important news that readers look for. Other than the local newspaper there is no source to provide it.

Local newspapers may survive by being "all local" along with their websites. This is what the American newspaper was a century-and-a-half ago. Few papers had any access to news from outside their small regions. People turned to their newspapers as a way to find out about the smaller, more intimate world around them.

The future of the newspaper industry may take it back to 1855.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Outsourcing the newspaper business originally appeared on BloggingStocks on Thu, 15 Jan 2009 11:45:00 EST. Please see our terms for use of feeds.

Some big companies have already gone bankrupt. The Tribune Company is the most recent. But, one of the trend's earliest victims was Lehman.

At the economy goes deeper into Hell with each passing month, bankruptcy attorneys will become the richest lawyers in America.

According to MarketWatch, "A sour economy and tight credit market clearly are just the right ingredients to bring about a wave of bankruptcies." There is no shame in it. Airlines have been doing it for decades.

Chapter 11 is actually a nifty way to stiff debt holders and employees. If a company can find an investor who wants to gamble they can get most of a bankrupt firm's assets in court, a debtor-in-possession, a judge can void loans and employment contracts in the name of keeping a troubled firm alive.

All of that may be good for the operations who seek court protection, but the trend would do further damage to the economy. Many of the firms who financed companies that are in trouble are banks. More losses for them will lead to more write-downs. And, that leads to more shareholder dilution and more government aid. On the employment side, cutting big numbers of people increases joblessness. That, in turn, ratchets down consumer spending and pushes up government costs to support those without work.

Otherwise, Chapter 11 is a great idea for companies in peril.

Douglas A. McIntyre is an editor at 24/7 Wall St.

Bankruptcy becomes exit of choice originally appeared on BloggingStocks on Tue, 09 Dec 2008 11:11:00 EST. Please see our terms for use of feeds.

A lot of America's newspaper companies have been in trouble. Advertising has been down as much as 15% this year and that has gotten worse in the last few months.

Almost all of the chains have had to cut staff and some properties have been put on the block to help the companies pay down debt. But, none of the really big operators in the business have had to go bankrupt.

That may change this week. The Tribune Company, which went private about a year ago, may not be able to make its debt service payments. According to The Wall Street Journal, "Tribune's latest actions underscore the deepening distress enveloping Tribune and other newspaper publishers."

The headline about the Tribune's trouble may be about the newspaper industry, but the story is just as much about the private equity/LBO trend that hit record levels less than two years ago. The Tribune Company was able to borrow almost $12 billion in an industry which was already beginning its downturn. That says a remarkable amount about the level of risk that bankers were willing to take to get fees.

Now, the firms that put the debt into the Tribune transaction are faced with getting pennies on the dollar. Newspapers may be a bad business, but it looks like private equity is turning out to be even worse.

Douglas A. McIntyre is an editor at 247wallst.com

Will The Tribune Company go bankrupt? originally appeared on BloggingStocks on Mon, 08 Dec 2008 08:50:00 EST. Please see our terms for use of feeds.

I just heard that Dean Baquet, the editor of the Los Angeles Times, has been pushed out by his Chicago-based overlords because he refused to oversee any more staff cuts.

Well, all of us members of the Fourth Estate, past and present, saw this coming. It's just another ill tiding for the newspaper industry.

The Tribune Company (NYSE:TRB), owners of the Chicago Tribune (and lots of other media outlets), own the Los Angeles Times. It's been relentless in its pursuit of profits, slashing staff and other resources. It's slowly starving its brand by trying to wring every last penny of profit out of its business. And when was the newspaper business ever a money-making operation?

Yes, the newspaper industry is dying. Yes, more people get their news now from the Internet or TV. Yes, advertising revenue has tanked, again thanks to the Internet. I'll even hazard to say there won't be newspapers as we know them in 20 years time. But it ain't dead yet. There are still millions of people who get a newspaper every day, for whatever reason. And those people want a good product. The Los Angeles Times was a good product. A great brand.

Continue reading Chicago to LA Times: drop dead

Chicago to LA Times: drop dead originally appeared on BloggingStocks on Tue, 07 Nov 2006 19:25:00 EST. Please see our terms for use of feeds.