Bismarck Tribune’s Parent Company On The Verge Of Bankruptcy
According to Bloomberg, Lee Enterprises, Inc. (which owns the Bismarck Tribune along with dozens of other newspapers) is having significant revenue problems and is asking lenders to approve either higher rates to restructure its debt or pre-approve a bankruptcy package.
Lee Enterprises Inc. is offering lenders higher rates and equity interests to refinance debt as the owner of the St. Louis Post-Dispatch seeks to avoid bankruptcy, according to four people familiar with the matter.
Creditors Monarch Alternative Capital LP and Goldman Sachs Group Inc. (GS) are leading talks with the Davenport, Iowa-based company and its adviser, Blackstone Group LP (BX), said the people, who declined to be identified because the discussions are private. Lenders will also be asked to approve a pre-packaged bankruptcy, which the newspaper owner will pursue if an out-of- court restructuring doesn’t gain enough support, they said.
The publisher of 53 daily newspapers in 23 states has to refinance $1 billion of loans and bonds that mature in April after abandoning plans to sell $1.06 billion of high-yield notes in May. Its shares have plunged 67 percent in the past year as newspaper advertising revenue are squeezed by competition from the Internet and the U.S. economic recovery is restrained by a 9.2 percent unemployment rate.
There’s a bit of spin here in blaming these problems on the current recession. I’m sure that’s exacerbating Lee’s problems, but the company was struggling with revenue issues far before the current recession, as most of the newspaper industry has.
That’s because traditional newspapers are a failed medium. They aren’t profiting any more because the model where monolithic news bureaus printing the news on dead trees and delivering it to people is dying. That’s not how most people are going to get their news in the future, and the overhead in that sort of a model is choking the industry to death.
The future of media, I think, is more outlets covering narrower beats. We might have a news bureau that does nothing but report on state politics. Or on a given city or region’s politics. We may have another news bureau that does nothing but sports, and another that does nothing but business, industry or investment news.
And forget about printing the news. It’s too slow. By the time you get it on paper and get it in front of somebody’s face, the news is old. There might be a niche in print publication for longer-form journalism, but I’m not seeing it.
I’d be very surprised if the Bismarck Tribune were still around, at least as we know it now, five years from now. Some will associate that with the “death of journalism,” but that won’t be true. Journalism isn’t changing. The news industry is changing. Outmoded business models are dying, and that’s a good thing.Tags: bismarck tribune, lee enterprises, North Dakota News