The State of Decline

Editor and Publisher, the self-described "America's Oldest Journal Covering the Newspaper Industry," has folded.

They may have covered the American newspaper industry but E&P has been foreign-owned since 1999. Yes, that's right. They have been owned by VNU, the Dutch company, who have happily invested money into syncing the anti-Americanism message in our newspapers. (VNU Wikipedia entry.)

This December 22nd story in E&P on newspapers in bankruptcy shows how much American banks - especially JP Morgan have lost in propping up the industry. [Bolding mine.]

Published: December 22, 2009 9:58 AM ET
NEW YORK A look at some of the newspaper publishers that have filed for Chapter 11 protection:

-- Tribune Co. -- The owner of the Los Angeles Times, Chicago Tribune, other daily newspapers and TV stations sought Chapter 11 protection in December 2008, burdened by $13 billion in debt. Most of it came from a complex buyout in which Sam Zell took the company private in 2007. Architects of the buyout had made overly optimistic projections for ad revenue. Tribune sold the Chicago Cubs and replaced Zell as chief executive, although Zell remains chairman. Tribune isn't expected to file a reorganization plan until at least February.

-- Freedom Communications Holdings Inc. -- On Sept. 1, the owner of The Orange County Register in California and dozens of other newspapers sought bankruptcy protection. The "prepackaged" plan, approved by a majority of the company's top-tier, secured lenders, would leave the family and two investment firms that own Freedom with no more than 2 percent of the company. The rest of the stock would go to 27 lenders owed nearly $771 million; lenders, led by JPMorgan Chase & Co., would forgive most of that debt. Not all lenders approve, and in December, a judge allowed a committee of unsecured lenders to submit an alternative plan. Meanwhile, Freedom reached a deal to sell the East Valley Tribune in the Phoenix suburbs.

-- Philadelphia Newspapers LLC -- Creditors are trying to take control of the company that owns The Philadelphia Inquirer and Philadelphia Daily News and have hired former Publisher Bob Hall as an adviser. This hard-fought Chapter 11 case began in February. The newspaper company proposes to shed most of its $400 million in debt by repurchasing the company through a bankruptcy auction for about 22 cents on the dollar. The proposal calls for keeping Brian Tierney as publisher. Now the case turns on whether senior lenders can use the $300 million they're owed to make a competing bid. The 3rd U.S. Circuit Court of Appeals is considering the issue.

-- Sun-Times Media Group Inc. -- The owner of the Chicago Sun-Times and suburban newspapers filed for bankruptcy protection in March. Private investors led by Chicago banker James Tyree bought the company for $5 million and agreed to assume about $22 million in liabilities. The sale was finalized in October after leaders of five unions reversed course and agreed to contract changes demanded by Tyree. Among the concessions: the extension of 15 percent pay cuts that were originally called temporary.

-- Journal Register Co. -- The owner of the New Haven (Conn.) Register and other daily newspapers emerged from bankruptcy protection Aug. 7. The company had listed $692 million in debt -- the bulk held by JPMorgan Chase. The restructuring plan cut what the company owed to secured lenders to $225 million in return for ownership. The plan wiped out stockholders, largely investment funds, and split a $2 million pool among unsecured lenders. Before making its filing in February, the company had agreed with most of its lenders on a reorganization plan.

-- Star Tribune Holdings Corp. -- Heavy debt from Avista Capital Partners' 2007 purchase of the Star Tribune in Minneapolis prompted its Jan. 15 bankruptcy filing. When the newspaper emerged from Chapter 11 on Sept. 28, $480 million of debt to senior lenders got reduced to about $100 million. The main lenders -- led by investment group Angelo, Gordon & Co. -- are the new owners and named a new chairman, Michael Sweeney, managing partner of local private equity firm. All 10 unions agreed to concessions. Company renamed Star Tribune Media Company LLC.

Who in their right mind would lend money to newspapers?

VNU is up for sale. "VNU (Amsterdam) has received a non-binding proposal to purchase the company for 28 [pounds sterling] to 28.50 [pounds sterling] per common share, or about $8.8 billion, from a private equity consortium consisting of AlpInvest Partners (New York ), The Blackstone Group (New York), The Carlyle Group (New York), Hellman & Friedman (San Francisco, CA), Kohlberg Kravis Roberts & Co. (New York), Permira (New York) and Thomas H. Lee Partners (New York). VNU said the proposal was made after several weeks of diligence and access to VNU management. " The consortium members are affiliated funds of AlpInvest Partners.

And it's funny how U.S. newspapers don't mention the ownership of E&P. And only one report describes AlpInvest Partners as "Europe's largest investor in private equity funds."

Unsecured creditors at Freedom Communications Holdings would only get $5m for their $300m in claims.