(Host) The newspaper company that owns the Brattleboro Reformer and the Bennington Banner plans to file for reorganization in federal Bankruptcy Court.
The owner of the Denver-based MediaNews Group says the Chapter 11 bankruptcy itself won’t affect jobs or operations at any of its papers. But changes are on the horizon.
VPR’s Susan Keese has more.
(Keese) With 54 daily newspapers and over 100 non-dailies, MediaNews is one of the largest newspaper companies in the country.
MediaNews spokesman Seth Faison says all but one of the company’s papers *are eking out a profit, even though ad revenues are down throughout the industry.
But over the last decade, Faison says the company’s newspaper holding company amassed $930 million in debt.
(Faison) "It was accumulating newspapers that looked like good deals. After 2008-2009 that nearly billion dollars in debt became unsustainable."
(Keese) So the company has struck a deal: its major bondholders have agreed to swap most of the debt for ownership shares in the company.
Under the agreement, MediaNews CEO Dean Singleton and his management team will own just 20 percent of the holding company’s stock. But a special classification of that stock allows Singleton to continue running the business.
The Chapter 11 bankruptcy is a "pre-packaged filing," meaning the parties have already agreed to the terms. Faison says the company should be out of bankruptcy in a few months.
(Faison) "It just has less debt, more financial flexibility going forward in an environment that may involve some other purchases or operating agreements or consolidations…. But for the present, there are no changes to the 54 newspapers that are owned by MediaNews."
(Keese) The company isn’t saying anything more about consolidations and how they might affect local newspapers.
A MediaNews press release says the reorganization "gives us some breathing space to create a new model for the papers we publish."
Faison says the company isn’t yet sure what that new model will be. Martin Langeveld is a former publisher of the Brattleboro Reformer and a blogger for Harvard’s Nieman Journalism Lab.
Langeveld says he doubts that any local papers will be merged.
(Langeveld) "Dean has always felt that it’s important to maintain the local brands, the local titles, and I think that that would be the last thing that he would consolidate in terms of merging newspapers. When he’s talking about merging, he’s talking about merging newspaper functions and back office functions not merging newspaper titles."
(Keese) Langeveld says the company’s papers in southern Vermont and northern Massachusetts already share business functions, publishers and ad layout.
(Langeveld) "The consolidation at those levels has already happened and I wouldn’t expect to see too much more."
(Keese) In Vermont, the company owns the Bennington Banner, the Brattleboro Reformer, The Manchester Journal, Bellows Falls Town Crier and the Original Vermont Observer.
It also owns 13 papers in Massachusetts, including the Berkshire Eagle and the North Adams Transcript.
For VPR News, I’m Susan Keese.