PRESSED FOR CASH Twin City Paper in Trouble

[LaStrega]

PRESSED FOR CASH Twin City Paper in Trouble

By ZACHERY KOUWE

May 4, 2008 -- The Minneapolis Star Tribune, reeling under a heavy debt load and plummeting advertising sales, is on the brink of bankruptcy, The Post has learned.

One of the nation's top dailies, "The Strib," as it is known to readers in the Twin Cities, recently hired the Wall Street powerhouse Blackstone Group to restructure its balance sheet after failing to meet its debt obligations, according to people familiar with the company.

The broadsheet is unlikely to shutter its doors, but its creditors, including the banking giant Credit Suisse Group, figure to eventually end up controlling the paper. Down the road, the creditor group could then sell it after dramatically cutting costs.

The private-equity firm Avista Capital Partners, run by former Credit Suisse deal maker Tom Dean, purchased the Star Tribune from the McClatchy Co. in 2006 for $530 million. The New York firm, which put up $100 million of its own money and borrowed the rest, stands to lose its entire investment, sources said.


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Chris Harte, our Publisher, is writing a (presumed) rebuttal which will run in tomorrows Star Tribune Business Section.

This does not bode well for me. The company has already stated, during Union negotiations, that myself or another Paginator/Composer will be out the door by September 1st.
:scared:

[gristy]

1. Looks like the only reason the Star Tribune is near bankruptcy is because the borrowed money

used to buy it was put on its balance sheet as debt.

Have I got that right?

[LaStrega]

3. The Par Ridder fiasco didn't help ...

That lawsuit cost millions. Then when Par and Jennifer Parratt left they both purportedly got huge bonuses. The company also paid millions over the last year-and-a-half to consultants who accomplished zilch. So far well over 600-people, from artists to prepress to journalists and columnists, have been layed off. It sure seems Avista is a shitty investment firm and apparently peopled with shortsighted idiots.

[Deja Q]

2. They offshored their graphic design division, but that can not save them.

The internet is changing rather a lot. In some ways, good. In some ways, not so good. But it's change nonetheless.

As we see things right now, it is not good. What if, like a phoenix, the current system goes to ashes but what resurrects out of it will be brighter and stronger than ever?

Best wishes to you during the transition time; let's hope the net outcome is a good one.

[LaStrega]

4. Thanks much HypnoToad ...

I'll tell you what we employees have theorized: Avista bought the STrib expecting to sell the four parking lots to Zygi, then move all the (425) Portland Ave. employees to our Heritage Plant (800 North 1st St.) ... then raze the Portland building and sell the rest of the property to Wilf for his swanky mall/restaurant venture.

Then a bridge collapsed. *poof* That plan went directly into the shitter.

[kickysnana]

5. Everyone in our Sr building dropped Strib when they dropped the TV magazine.

We are really on the edge of both cities here but the Strib had the most subscriptions. People called and complained and then when nothing happened they did not renew. I am guessing you lost half of your subscriptions here.

I was offered a Sunday subscription by email for .50 a week for a year which I took.l Most people here do not have email and hang up on telephone solicitations. They don't allow door to door salesmen so unless they get a believable mailing out for a lot less money or promising them their TV weekly these people are lost to you forever.

For decades the Saintly city was the most liberal but not for some time. I agree that they probably wanted to take the assets out and didn't give a rip about running it.

Sorry about your situation. Minnesota is really on a race to the bottom for stupid in almost everything.

[LaStrega]

6. You're not the only ones to drop ...

Getting rid of TV Week was perhaps the single most stupid move the new owners made. We lost literally *thousands* of subscribers for that little maneuver alone.

[Voltaire99]

7. Who needs it? Minnesota Monitor is tons better.

True, it will be kind of hard for a few grizzled Wayzata pricks to get their weekly Katherine Kersten fix.