Monday, June 22, 2009

Bankruptcy is hard for those inside, but a new business model means low overhead

Usually "new business model" is a code word for increasing the top line or the bottom line. In fact, "new business model" means radically reducing overhead to be able to earn money in a changed market.

As newspapers right size their overhead they can again focus on the value of Print to earn revenues. Microzoning, versioned newspapers, connections to the web that deliver the metrics every body has to have.

MediaPost Publications
'Star Tribune' Files Bankruptcy, 'Cleveland Plain Dealer' Issues Pay Cuts
"Separately, the Star Tribune of Minneapolis submitted a Chapter 11 bankruptcy reorganization plan to the U.S. bankruptcy court for the Southern district of New York last week. If the plan is approved, the paper could exit Chapter 11 bankruptcy protection as early as this fall.

To lay the groundwork for the plan, the Star Tribune's management has extracted critical concessions scaling back wages, benefits and employment guarantees from most of the Tribune's unions, yielding about $20 million in cost savings.

It has also required negotiations with a number of lenders, with top priority given to secured creditors. As part of the plan, publisher Chris Harte said 'previously issued equity will be canceled and will not result in any recovery to the owners.' He added, 'The Plan also provides for the reorganized company to emerge from bankruptcy as a privately held enterprise.'"

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