The holding company for MediaNews Group, publisher of The Denver Post, San Jose Mercury News and 52 other daily publications, has filed for bankruptcy, Editor and Publisher reports.
Affiliated Media Inc., the privately held parent company for the publisher, expects to emerge from bankruptcy in one or two months. It has said that it has a deal with creditors to reduce its $930 million debt to $165 million. Lenders including Bank of America would get most of the company's stock, wiping out shareholders such as Hearst Corp. A bankruptcy court in Delaware still has to approve the plan.
MediaNews, which recently announced plans to erect paywalls around two of its newspaper websites, says its newspapers will not be affected by the bankruptcy, with chairman William Dean Singleton to remain in his current position. He and the company president Joseph Lodovic IV will own all class A shares, which means they can appoint a majority of the board of directors.
"By aggressively facing the challenges of the newspaper business, we will continue to deliver high-quality journalism and will prepare our newspapers for a promising future," Singleton, who is also chairman of The Associated Press, said in a statement.
Bankruptcies are becoming increasingly common in the industry. This case is one of at least seven and possibly up to 14 or more bankruptcy filings in the US newspaper industry since December 2008. Other newspapers affected include the Chicago Tribune, the Los Angeles Times, the Orange County Register and the Star Tribune. Other recent bankruptcies include the Canadian newspaper publisher Canwest, for which potential investors are currently preparing bids.
Even so, it's not all bad news, as the bankrupt Tribune Company just posted a better than expected operating cash flow. Let's hope better days are ahead for MediaNews Group as well.