Newspapers down for the count

I’ve blogged about the most recent newspaper industry problems here and here and even threw a little commentary on how this financial crisis is part of a downward-spiraling whole.

Here’s a story on the issues facing newspapers across the industry.

From the link just above this graf:

readers from print to the Web has become a widening torrent in this recession year. Most newspapers remain profitable, but the margins are dropping fast, with the industry losing about 15 percent of its ad revenue this year.

 

But the companies in the weakest condition are there largely because they borrowed a lot of money to buy papers, often at inflated prices, and the biggest of those deals were struck in 2006 and early 2007. Tribune’s was the biggest of those deals, $8.2 billion to take private the company whose assets include The Los Angeles Times, The Chicago Tribune and 23 television stations, a transaction that almost tripled the company’s debt.

In the year before that takeover was announced, the McClatchy Company bought Knight Ridder, including papers like The Miami Herald and The Kansas City Star; the MediaNews Group bought several papers, including The San Jose Mercury News and The Pioneer Press in St. Paul; investors in Philadelphia bought The Inquirer and The Daily News; a private equity firm, Avista Capital Partners, bought The Star Tribune in Minneapolis. Smaller companies like GateHouse Media bought up dozens of local papers.

If it were possible to unwind those deals, ”the business would still be in pretty difficult shape,” said John Puchalla, a vice president and senior analyst for Moody’s Investors Service.