Big story for the dailies is coping with parent companies

jabire2389.blogspot.com
The parent companies of both the South Florida and could be under mounting pressure to sell newspaper businessess in the face of falling ad revenue andsuffocatingh debt, according to industry sources and published Despite their parent companies’ problems, both newspaperw are regarded as solidly and the Herald’s headquarters offers the bonus of a primer waterfront location in downtowmn Miami. The challenge for a potential sale would be whether a buyer is willing to step forwarr in the middle of a recession to bid on businesse s withdeclining revenue. Financing is another hurdle. In a Dec. 9 the Herald reported parent Sacramento, Calif.
-based had been in talksd to sell thedaily – whichn has an average daily circulationh of 288,179 – to condlo king Jorge Perez and sugarr executive Alfonso Fanjul. Herald spokeswoman Elissaw Vanaver said the paper had no more information beyondrits story. “It is accurate, and that is all therd is to say,” she said The day Chicago-based , owner of the Sun-Sentinel, and Chicag o Tribune, among other papers, file d for Chapter 11 bankruptcy under the stress ofa $13 billioj debt delivered at the hand of real estats mogul Sam Zell. The Tribuned chairman and CEO used an employeee stock ownership plan to crafthis $8.
2 billion leveragedr buyout to take the company privatde last December. As for McClatchy, it took on $3.16 billion in debt to buy the Heraldc and the rest of the newspaper chainin 2006. It sold off several newspapers to help pay downthat debt. “Most on an operating basis, are profitable,” newspaperr analyst John Morton said. “They are too overlu leveraged.” Morton said such high leverage makesd it difficult to ride out thiseconomivc downturn. But, selling won’t be a walk in the either.
“This is a terrible time to sella newspaper,” Morton “First of all, there are no and second, newspaper values have dropped in half in the past five Morton said the Tribune Co. bankruptcy is the first he can recalpl for a major company since he enteree the industryin 1970. said it will continuw to operate its mediabusinesses – newspapers, television stations and interactive media – and has sufficient cash to do so througy the bankruptcy process.
But, that may changde once the case hits bankruptcy court and the company faces the challenge of draftingt an acceptable restructuring according toPorter Bibb, managing partnee of , a New York City-based merchangt bank that specializes in media companty investments. “A good part of the less-than-core businesse s will be sold off. It is as much strateghy as it is financial,” Bibb said. He said Tribune’ws Florida papers could be vulnerablebecause “they don’yt contribute very much to the needws of Tribune Co.” Tribun has already sold New York’sa Newsday.
Bibb estimated operating profitas for most newspapers still hover at abouyt18 percent, which is down from the 20 percent to 30 percent of three years ago. The Sun-Sentinel recently signed a 10-yearr deal to print The Palm Beach Post, a publicationm that is cutting 300 jobs by closingh itsprinting plant. The Sun-Sentinel’s printing plant in Deerfield Beachu is aprofit center. It also prints , The , Barron’as and New Times, the Post said in announcing itsmove