NEWS ALERT
from The Wall Street Journal
Dec. 7, 2008
Tribune is preparing for a possible bankruptcy-protection filing as soon as=
this week, according to people familiar with the matter, opening a new fro=
nt of trouble for the newspaper industry.=20
As Tribune continues discussions with its lenders to rework its debt load, =
the newspaper-and-television concern in recent days has hired Lazard as its=
financial adviser and a legal counsel for a possible trip through bankrupt=
cy court.
For more information: http://online.wsj.com
–The announcement above just gave the post below a greater sense of urgency–
I’m looking to get information about an idea that is floating around with more and more regularity from the newspaper industry “experts” and “commentators”. The idea is turning a failing for-profit newspaper into a non-profit news source. I’m not sure why a newspaper would want to do this. That’s why I’m reaching out to experts in finance and law.
If there is someone more appropriate who can answer this question, please forward this post along to them. I want the expert’s opinion on:
- the feasibility of such a switch
- the potential upside
- the potential downside
My own unqualified opinion is that:
- newspapers that have external revenue streams like wsj.com (newscorp/Fox/Murdoch) and washingtonpost.com (Kaplan/CableOne/Graham) don’t won’t want to box themselves in with non-profit owner equity limitations (there is no owners equity)
- failing newspapers like McClatchy that have so many debt obligations ($1.9billion), they can’t switch if they want to (i don’t think they want to )
- floundering papers like the New York Times have so many stakeholder obligations that they cannot just give up attempting to make money.
- only new news sites can pull this off (wikipedia, spot.us)
- Bankruptcy protection seems a more real option than switching to non-profit status
I am pursuing this information for my own edification, however If you would permit me I would publish the piece as a Q&A on metaprinter.com.
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