The daily dose of bad news

[SockPuppet]

Here's this: http://www.sacbee.com/103/story/1018450.html

and this: http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=ad3X7C3qlvA4

I don't think I want to see what Wednesday brings.

 

[Ben_Hecht]

Here's this: http://www.sacbee.com/103/story/1018450.html

and this: http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=ad3X7C3qlvA4

I don't think I want to see what Wednesday brings.

Sell those Cubbies.

No sympathy for Tierney. None.

 

[Birdscribe]

Here's your money grafs:

Tribune's $450 million of 4.875 percent notes due in 2010 traded last week at 69.5 cents on the dollar to yield 23.7 percent, or 20.7 percentage points more than similar-maturity Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Bonds are considered distressed -- an indication investors are concerned the issuer will default -- when they trade at a yield 10 percentage points above similar-maturity Treasuries. The same is true for loans trading below 80 cents on the dollar.

A corporate bond paying 23.7%? Folks, this is otherworldly.

To put this in perspective, the highest yielding Ford Motor bond -- one rated CCC or "junk" -- is 10.863%. And this is a company that in the past two years, has lost more than $14 billion.

 

[rpmmutant]

I figured Singleton's debt situation was bad, but that he is close to defaulting on all his loans is frightening. Worst-case scenario, I figured he could survive three maybe four years of diminishing returns. His debt load must be worse than anyone anticipated. Overleveraged and bankrupt is no way to go through life son.

 

[Tucsondriver]

I figured Singleton's debt situation was bad, but that he is close to defaulting on all his loans is frightening. Worst-case scenario, I figured he could survive three maybe four years of diminishing returns. His debt load must be worse than anyone anticipated. Overleveraged and bankrupt is no way to go through life son.

I'd think this news would fuel speculation of a Hearst takeover...

 

[steveu]

Hearst's papers aren't bad at all, but I have to wonder if this would be McClatchy all over again. Debt debt debt debt...

 

[Kid Bro Sweets]

Just doing my duty/dooty:
*********
Gannett (GCI), the country's largest newspaper company posted its revenue for the May period.

Advertising revenue dropped 14.3% to $347 million. This was an acceleration from the year-to-date rate of decrease of 11%.

Real estate classified was off over 30%.

Most notable was the sharp decrease in ad revenue at USA Today, the country's largest newspaper by circulation. Sales were off 18.4% compared to the previous year as ad pages fell from 324 to 260, a 20% decline.

Because of the national nature of its distribution, USA Today's trends are likely to mirror those of publications including The Wall Street Journal (NWS), Time (TWX), Newsweek (WPO), and BusinessWeek (MHP).

http://www.247wallst.com/2008/06/gannett-gci-usa.html

 

[Tucsondriver]

If/when Lean Dean goes belly up, then what?

 

[Angola!]

If/when Lean Dean goes belly up, then what?

This is something I've long wondered. Will all of those papers just fold? Will a big chain buy them for cheap and then slash their workforces?

 

[Football_Bat]

If/when Lean Dean goes belly up, then what?

This is something I've long wondered. Will all of those papers just fold? Will a big chain buy them for cheap and then slash their workforces?

If they slash the workforce any more, they might as well shut the doors because they're already slashed to the bone.

Then again, there might be a tax writeoff involved which would make this option attractive.

 

[Joe Williams]

If/when Lean Dean goes belly up, then what?

This is something I've long wondered. Will all of those papers just fold? Will a big chain buy them for cheap and then slash their workforces?

Would there be any chance that, by buying the papers "for cheap," the next owner might not face the same burden of debt service and thus might be able to make ends meet with the cash flow of the reduced profit margin? If so, that might be the closest thing to an answer for this business. The profits coming in generally are enough, except for a) bloated expectations from the past, and b) the need to pay principal and interest of loans used to buy the joints.

 

[SockPuppet]

McClatchy is $2 billion in debt.
Any math/financial whizzes want to figure what the interest is on that?
Whatever that total is, cutting $70 million in salary _ as McClatchy did this week _ would seem to be a drop in the bucket. Plus, McClatchy's projected ad rev is down 15 percent so far this year. Only way to make up for that is for ad rev to be up 30 percent the rest of the year. Like that's gonna happen.

 

[goalmouth]

You've got to have a profit somewhere against which to write off a loss. It's not just a line on a ledger.

 

[Idaho]

I am far from an expert on this stuff, but my gut feeling is a few of the big-boy chains will go belly up. The papers will be sold -- either to other chains for cheap, or to local owners for cheap -- and they will be retooled basically starting from scratch but with a familiar name.

and when retooled, they will have an astonishingly small newsroom compared to the slashed-and-burned shops of today.

but they will live on, albeit in a vastly different incarnation.

 

[Lugnuts]

Good gracious.

I read Zell's broadcast division is holding steady or showing modest increases in revenue for the same period year-to-date.

But they should be WAY up from last year-- it's an election year. Local stations rake it in and make up for losses with the increased ad revenue from election years. And there was a Democratic primary contested everywhere.

There will be a staggering dropoff in ad revenue for the broadcast division starting in November.

What a freak show. If he doesn't start shedding assets like yesterday, he'll be belly up by January.

Paging a Mr. Eli Broad, a Mr. Ronald Burkle, and a Mr. David Geffen to the ink-stained courtesy phone.

 

[Moderator1]

Unless I missed it elsewhere, today's bad news seems to come from the Register-Guard:

http://www.registerguard.com/csp/cms/sites/dt.cms.support.viewStory.cls?cid=114648&sid=1&fid=1

 

[Write-brained]

If/when Lean Dean goes belly up, then what?

This is something I've long wondered. Will all of those papers just fold? Will a big chain buy them for cheap and then slash their workforces?

What I do know is Mr. Singleton will land softly with his hefty salary and likely golden parachute.

 

[Tucsondriver]

Does anyone think the consequences of Lean Dean and Zell folding would be good, or should we start organizing bake sales?

 

[Joe Williams]

Misery loves company. Come on into the pool, despots! The water's swill.