Pat Dollard

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MSM Bailout Next For Congress?

Drops in revenue, sales, advertising … lay-offs, cut backs.

Remember where you heard it from first.

If it turns out I’m proven right … my spider senses need to be bottled.

If it turns out I’m wrong … makes for a good fiction plot for a George Orwell-type writer.

Either way, remember what I said. The government (Congress) gives nothing without taking control.

The media outlets start begging for bailout money, the government has their covert “in” with a Fairness Doctrine like control.

Just an example: Anyone who has lived in the state of Ohio for the last 30-odd years has seen the speed limit go from 75 to 55 to 75 to 65 … Ohio could grow some balls and say, “Well, hell! Go 95 …” But the state of Ohio would lose federal funding for roads and such.

The government is Satan … It gives nothing without expecting to collect in some form or another when it sees fit.

Hence, we may be going 85mph on the road to “nationalized” media in this country …

Times Co. to borrow against building

By Richard Pérez-Peña – (IHT)

The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits.

The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James Follo, the Times Company’s chief financial officer.

The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.

The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company’s worsening finances. Analysts have said for months that selling or borrowing against assets would be the company’s best option for averting a cash flow problem next year.

Standard & Poor’s recently lowered its credit rating on the Times Company below investment grade, and Moody’s Investors Service has said it was considering a similar move. Times Company stock, which has lost more than half its value this year, closed on Friday at $7.64, down 30 cents. More Articles in Business » A version of this article appeared in print on December 8, 2008, on page B2 of the New York edition.

Tribune May Face Potential Bankruptcy Filing

(NYTimes Business)

The Tribune Company, the newspaper chain that owns The Chicago Tribune and The Los Angeles Times, is trying to negotiate new terms with its creditors and has hired advisers for a possible bankruptcy filing, according to people briefed on the matter.

Tribune is in danger of falling below the cash flow required under its agreement with its bondholders, but it is not clear how seriously Tribune is thinking about seeking bankruptcy protection. Analysts and bankruptcy experts say that the hiring of advisers, including Lazard and Sidley Austin, one of the company’s longtime law firms, could be a just-in-case move, or a bargaining tactic. The company would not comment on Sunday.

Tribune went private last December, paying more than $8 billion in a deal that put Samuel Zell, a real estate billionaire, in control of the company. It has struggled since then under the resulting debt, forcing deep cuts at its newspapers. It also sold Newsday to raise cash.

The Tribune Company owns 23 TV stations and 12 newspapers, including two of the eight largest in the country by circulation. As of Sept. 30, The Los Angeles Times had weekday circulation of 739,000 and the Chicago Tribune had 542,000.

Tribune has been trying to sell the Chicago Cubs baseball team; the team’s stadium, Wrigley Field; and the company’s share in a regional cable sports network. Such a deal, which could bring the company more than $1 billion, has been a crucial part of its strategy since last year.

But the sale — originally expected to take place before the last baseball season — has been delayed by several factors, including the tight credit market.

It is not clear how recent federal allegations of insider trading against Mark Cuban, believed to be the highest bidder, could affect the sale.

Rating agencies say Tribune’s short-term problem is not in making payments on its debt. Instead, the company is struggling to comply with a requirement that its main debt from its acquisition of the company not exceed nine times its earnings before interest, taxes, depreciation and amortization.

A quarterly test of that compliance is expected at the end of this month. A failure to comply would mean Tribune had technically defaulted, even if it continued to make payments. Technical defaults can sometimes lead to bankruptcy.

Companies in that position usually negotiate new terms with their lenders, often paying higher interest rates in return for less stringent cash-flow requirements. But such negotiations have become more difficult in recent years, as lenders have become more likely to sell pieces of debt to third parties, which must approve any new terms.

Like most newspapers, Tribune’s have suffered double-digit percentage declines in advertising this year, as ads and readers continue to shift to the Internet, and the recession has prompted retailers and other businesses to curtail their ad spending. What makes Tribune’s problems more serious is the heavy debt load it carries as a result of last year’s buyout.

The weak state of newspapers has made some lenders more loath than usual to force bankruptcy, fearing that it could worsen their chance of significant recovery, or at least delay it.

The companies that own The Inquirer and The Daily News in Philadelphia and The Star Tribune in Minneapolis recently suspended debt payments but have not filed for bankruptcy.

As the economy weakens, other lenders have become more aggressive about forcing debtors into bankruptcy when they believe such a move is inevitable, to preserve a company’s valuable cash reserves. Delaying can make it hard to emerge from bankruptcy successfully.

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McClatchy puts Miami Herald up for sale

By RICHARD PEREZ-PENA – (Herald Tribune)

The McClatchy Co., burdened by debt and a steep slide in newspaper advertising, wants to sell one of its most prized properties, The Miami Herald, according to people briefed on the company’s plans.

McClatchy, the nation’s third-largest newspaper chain, has approached potential buyers for The Herald, said these people. But they said they knew of no serious offers for the paper, reflecting the evaporation of major investors’ interest in buying newspapers.

The company refused to discuss the matter. Elaine Lintecum, the treasurer, said, “We do not comment on market rumors.”

The Herald is one of the largest of McClatchy’s 30 daily papers, with daily circulation of 210,000. It is also arguably the most prestigious, having won 19 Pulitzer Prizes. But it is not clear what kind of bids it might fetch, if any; with newspaper profits shrinking fast, the economy contracting and credit tight, many newspapers have been on the block for months without selling.

The people briefed on the company’s plans say that The Herald generates a very slim operating margin and that the most attractive part of any deal could be its prime waterfront real estate. But the Florida real estate market is in deep recession — one reason for the struggles of the newspaper, which used to benefit from heavy real estate advertising.

The bid to sell The Herald continues the fallout from McClatchy’s $4.5 billion purchase in 2006 of Knight Ridder, the newspaper chain that had owned the Miami paper. Largely as a result of that deal, one of the biggest in the industry’s history, the company has about $2 billion in debt, payments on which eat up much of its cash flow.

Some Wall Street analysts warned at the time that McClatchy, based in Sacramento, Calif., had overpaid, but even they did not expect the steep decline in newspaper advertising that began months later and has accelerated this year. The drop has been most pronounced in Florida and California, states where McClatchy has a major presence.