Newspaper bankruptcies on horizon

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20080709/COIBBI09/TPComment/?query=john+ibbitson

 

when tribune co is taking out $300m loans to pay off other loans, you know bankruptcy can't be too far behind.

sad.

is this what typewriter manufacturers felt like when word processors came along?

 

Code:

Damn whippersnappers putting us out of [s]bussines[/s] [s]busines[/s] business.

 

I'd get you some white out, but it's all dried up and crusty.

 

So, what happens if a newspaper goes bankrupt? Do they seize operations and everyone is out of a job?

 

I was expecting some meat to this. It said nothing that any number of us have posted here off the tops of our heads. It's like Exhibit A for why people shouldn't buy newspapers anymore.

 

If a newspaper didn't cost so much the debt service ruins you, a regional paper like the Trib might not be such a bad investment. It'd be a long-term deal, but the idea is to hang on until someone, anyone, figures out how to monetize the Internet. That could be 5 years, 10 years, tomorrow, or never, but you'd own a business with a real if declining cash flow in the meantime.

 

depends on what kind of bankruptcy we're talking about. in chapter 11, it's just about reorganization. but there would definitely be layoffs.

that article is stupid and alarmist. we're in the midst of a massive recession. some companies in all industries will fail. some will declare bankruptcy and reorganize. some will fold and disappear forever. but newspapers are in no more danger than any other business.

 

Those google guys did ok figuring out a way to monetize the internet on a dang search engine when they weren't even the first or second search engine.

 

No. Like Leo said, it depends what kind of bankruptcy. But ours would most likely be Chapter 11, which companies file all the time. They "restructure" -- i.e. cut jobs and other expenses -- and they get to wipe out some of their debt and other pesky things like pension plans. Essentially, they have to convince a judge that, with a few breaks, they can continue as a viable concern. But they stay open.
The big airlines have been in and out of bankruptcy for years and they're (mostly) still around. Not that working for them has been all that pleasant lately.

 

Nice...

 

So, this would be a good reason to not do 401k then?