By: E&P Staff
The Journal Register Company, a publicly traded newspaper company that owns 22 dailies and 300 non-dailies, now faces a massive debt problem and the possibility of being delisted from the New York Stock Exchange, and may consider filing for bankruptcy, according to an article in today’s New York Times by Tim Arango.
“If the company were to seek bankruptcy protection, as analysts said was possible, it would be a first in recent memory for a publicly traded newspaper company,” Arango writes. He quotes John Morton, the newspaper analyst: “This will just add to the gloom and doom that has settled over the industry.”
A spokesman for the company declined to comment.
All of this “raises the prospect of a public newspaper company?s being owned by its creditors ? in the case of Journal Register a consortium of banks that includes JPMorgan Chase and Deutsche Bank,” Arango points out.
“Journal Register?s troubles are more related to its debt load ? about $625 million at the end of 2007 ? than secular changes in the business.
“Four years ago, the company paid $415 million for several Michigan dailies, whose fortunes declined as automobile manufacturers in Detroit cut their advertising budgets….
“While the company struggles to make its debt payments, its operating performance has declined. Journal Register reported earnings before interest, taxes, depreciation and amortization of $90 million last year, a figure that is expected to slip to $70 million in 2008, according to Wachovia Capital Markets.”
Rick Edmonds, the business analyst at Poynter, tells Arango: ?This is the year that maybe those companies that are highly leveraged can?t make their debt payments, and Journal Register could be the first.”
The rest of the article is at www.nytimes.com.