COMM 150, 337: Newspapering woes

http://capitolfax.com/2011/12/01/report-sj-r-may-sell-its-building-as-parent-faces-a-billion-dollar-debt-payment/

[State Journal-Register publisher Walt Lafferty’s] disclosure came during a recent newsroom meeting called to discuss the efforts of GateHouse Media, the newspaper’s owner, to turn around sagging financial fortunes. GateHouse stock, which sold for more than $20 a share during the initial public offering five years ago, is virtually worthless, selling for as little as four cents a share last week. The company has more than $1 billion in debt due in 2014.

Lafferty told the news staff that he will likely contact a broker about selling the building after Jan. 1, according to multiple sources who attended the meeting.

Rich Miller, Cap Fax editor-publisher

That company simply did itself in. It borrowed extensively to buy papers when the market was hot, and now it’s stuck with all those newspapers while the market is in a deep trough. That $1 billion debt payment next year may put it under.

…Adding… This post in no way should be meant to be seen as gloating over the SJ-R’s troubles. It’s a sad day for the paper and for Springfield. I have friends over there, and stories like this make me worry about them. Try to take this to heart in comments.

- wordslinger - Thursday, Dec 1, 11 @ 12:55 pm:

I don’t think newspapers saw how quickly and devastatingly the EBays and Craiglists of the world would take away their classified ad business. They all thought the papers would always own the local markets.

- Coach - Thursday, Dec 1, 11 @ 1:26 pm:

=== In the meantime, where is the SJR planning to locate their remaining staff? ===

In a two-bedroom apartment somewhere near the Capitol.




- Yellow Dog Democrat - Thursday, Dec 1, 11 @ 1:27 pm:

@wordslinger - you left out the 800 lb gorilla, Google. Which many newspapers still erroneously refer to as a “search engine” when in fact it is a classified ad company.

My grandmother was a reporter for the SJR back before Rich was born, and they are still one of the best sources of state policy reporting, so I wont gloat over their woes.



- Anonymous - Thursday, Dec 1, 11 @ 1:20 pm:

Gatehouse isn’t alone. Lee is in the same boat, saddled with a billion in debt from the Pulitzer purchase, and it, too, has been selling properties. And the staff downsizings continue, with fewer people asked to do more and more. It’s not that local newspapers aren’t viable, though. Lots of people think they are a defunct business model. They’re not. Local businesses still buy ads and readers still subscribe. No, I wouldn’t do what Warren Buffett just did in buying the Omaha publishing company, but there is still money to be made with the right business model, at least for a few more years. Is online the future? I don’t know. When you look at the paltry revenue that comes from online compared to the dead trees product, there’s only enough there to support an editorial staff that consists of an intern typing up press releases. I’ve been doing this for a living for 35 years, and these are difficult days, to say the least