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Parent of SJ Mercury, Daily News to file for bankruptcy protection

Original post made on Jan 18, 2010

The publisher of the Palo Alto Daily News, San Jose Mercury News, Contra Costa Times, Tri-Valley Herald and 50 other daily newspapers in the Bay Area and nationwide, is filing for bankruptcy protection.

Read the full story here Web Link posted Monday, January 18, 2010, 9:44 AM

Comments (26)

Posted by kuja, a resident of Palo Verde
on Jan 18, 2010 at 10:26 am

Can anyone tell me what this means? Does it mean that the Daily News and the Merc News will no longer be in print?


Posted by Steve, a resident of Old Palo Alto
on Jan 18, 2010 at 10:32 am

Some companies come out of bankruptcy even stronger than before. Some go out of business.

Cost cutting can affect the quality of the reporting that they print, making it harder for them to hold on to paying customers.


Posted by Jarred, a resident of Midtown
on Jan 18, 2010 at 10:53 am

[Post removed by Palo Alto Online staff.]


Posted by Sharon, a resident of Midtown
on Jan 18, 2010 at 10:55 am


Looks like all newspapers, with exception of the WSJ, are in free fall.

The NYT is leaking money and talent, the CSM only publishes a print edition once a week and many others papers are in Web only editions.

End of an era-- like horses and buggies.


Posted by Sucker, a resident of Another Palo Alto neighborhood
on Jan 18, 2010 at 11:12 am

Just last month the Merc News talked me into prepaying for a year for a discount. Super.


Posted by gwen luce, a resident of Barron Park
on Jan 18, 2010 at 11:14 am

according to Saturday Daily News announcement, this does not mean the demise of our local Daily....


Posted by merc staffer, a resident of Crescent Park
on Jan 18, 2010 at 11:15 am

In answer to the question, it is not expected to impact the Merc. (Other factors might, but not this.) The Bay Area-based MediaNews papers have already undergone much of the significant consolidation that Singleton is referring to - the Oakland Trib, Contra Costa Times, San Mateo Times, Santa Cruz Sentinel and Monterey Herald all exchange content with the Merc. And our design/copy editing desks have all been shrunken and moved to 1 place, Walnut Creek. Print production and most web work comes out of Walnut Creek, as well. I'm guessing Singleton wants to replicate this model elsewhere, where possible.


Posted by Evan, a resident of Crescent Park
on Jan 18, 2010 at 11:34 am

What does a ranch have to do with bankruptcy?


Posted by Bye-Bye-Mercury, a resident of Evergreen Park
on Jan 18, 2010 at 12:54 pm

Web Link

According to the Affiliated Medias Press Release (the Holding Company): "the company's debt of approximately $930 million will be reduced to $165M."

So .. someone is taking a $765M haircut .. and we're all "smiles" about that? Don't think so. The debt has been converted to equity, which can go up in price, or down in price—depending on the management that got MediaNews Group to where it is today.

The MediaNews "empire" was accrued one asset at a time—and that's where all of this debt was accumulated. Some of these assets can be sold, and that money used to pay down the existing debt, and presumably buy back the stock from the previous "investors" of debt who are now "investors" in equity. This will most certainly affect employees and various operations around the country.

Nobody is going to swallow $765M in losses and be happy about


Posted by Daniel Mart, a resident of Mountain View
on Jan 18, 2010 at 2:24 pm

Daniel Mart is a registered user.

This is awful ... more and more print publications biting the dust.

We cannot, and shall not, let these proud fixture of American culture and romanticism die. I fear the day when readers cannot lift up a newspaper and feel the ink on their fingers, or flip through the pages of a magazine; in a huge way, it goes deeper than these things. This is Americana; this is romance; this is our culture; this is our history; this is a result of what people have fought for to make this country great; and to let it die completely would be to destroy the very essence of innocence and humanity itself.

And I know some people - probably typical rich Palo Alto folk - on here are getting a good laugh out of this post, so if all you want to do is insult me, please don't bother to respondd.


Posted by Bye-Bye-Mercury, a resident of Evergreen Park
on Jan 18, 2010 at 2:53 pm

> We cannot, and shall not, let these proud fixture of
> American culture and romanticism die

Wonder what this guy would have said about the coming of the Internal Combustion engine around 1900?


Posted by Old Palo Alto, a resident of Old Palo Alto
on Jan 18, 2010 at 3:03 pm

It will be interesting to see how the transition from print journalism to online media will evolve. From an environmental standpoint, printing news on papers and passing them out to the public is archaic. I feel most sorry for the journalists who are caught in no mans land. In the final analysis however, I think online journalism will be a utopia for journalistic freedom of speech and thought.


Posted by Tim, a resident of Crescent Park
on Jan 18, 2010 at 3:07 pm

With the internet (Craigslist, ebay)...newspapers are dying a slow death. I see more people at Starbucks on their laptops than reading a newspaper, mag, or book. The sign of the times and I'm along for the ride like everyone else.


Posted by shrug, a resident of Leland Manor/Garland Drive
on Jan 19, 2010 at 5:07 am

Gotta admit, I miss the old days of sitting down with my coffee and reading good news and good editorials, but I dropped even my WSJ a year ago when they started converting to reporting news the same way the rest of the papers did, and making me pay for some editorial columnists who spout the same silliness I got through the SF Chron and the SJ Merc.

So, I went online all the way for all my State, National and International news and editorials.

Shrug. Not the same, and I miss the congeniality of sharing a paper at the table, including laughing at comics, but at least it is worth my time to read. Especially since I could avoid Doonesbury before, but now so many of them launch sneak attacks on all I believe in..well, forget it.



Posted by Former newspaper employee, a resident of another community
on Jan 19, 2010 at 9:16 am

The next generation will be surprised to find the quality of reporting their parents and grandparents enjoyed to be sadly lacking simply because there will be no income incentive for those so inclined to be good journalists to do so! Just who is going to pay the salaries of good investigative reporters? Advertising is bad in print but even worse online. Be careful what you wish for. Major Internet news sites very often gets it wrong at first because everyone is rushing to get it online first - no time for initial fact checking. I hope I'm wrong but I don't think so. Then again, it appears that does not matter to readers on line. When this recession ends hopefully businesses will start opening their ad budgets again.


Posted by K-Mart, a resident of Another Palo Alto neighborhood
on Jan 19, 2010 at 9:20 am

Daniel Mart--why don't you grow up. Must you inject your diatribes against "rich people" into every thread? I wonder if you make these posts in order to try to turn the discussion to you.


Posted by Palo Parent, a resident of Greenmeadow
on Jan 19, 2010 at 10:14 am

Whom among us is going to break the news to Mr. Mart that soon readers cannot lift up a newspaper and feel the ink on their fingers, or flip through the pages of a magazine while waiting for their turn to bowl at Palo Alto Bowl as well?


Posted by Keep the paper, a resident of Palo Alto High School
on Jan 19, 2010 at 10:50 am

I too, miss reading magazines and newspapers even though I am on my computer most of the day. It's just more relaxing than having to sit upright at a computer.

To those of you irritated by Daniel Mart, why do you respond to his posts? He is a troll, dedicated to provoking responses. I see his name and gloss over his posts, as I do with Fireman's posts.


Posted by Bye-Bye-Mercury, a resident of Evergreen Park
on Jan 19, 2010 at 1:25 pm

> The next generation will be surprised to find the quality of
> reporting their parents and grandparents enjoyed to be sadly
> lacking simply because there will be no income incentive for
> those so inclined to be good journalists

Reporters have not been known to have been millionaires .. although many have written books that have boasted them into that income bracket.

This issue of "quality of journalism" is certainly worthy of discussion. These days good, even great, journalism is found on blogs that have proliferated like spring flowers all over the web. The issue of compensation is still "iffy" for these writers, but the quality of journalism is not. Anyone who is concerned needs to "google" a little more.


Posted by Trend to the end, a resident of another community
on Jan 20, 2010 at 10:22 am

>> good journalists, hum-mm

never let the facts get in the way of your preconceived opinion.


Posted by paloaltomarino, a resident of Downtown North
on Jan 20, 2010 at 12:52 pm

Daniel Mart = Danielle Martell, he's a she, and she's certifiable (check her out some Monday night when she's speaking at Palo Alto City Council).

Newspapers are dinosaurs. While there are those of us old enough to enjoy a Sunday newspaper, we can just as easily find that content online. Where are all the "green" people when it comes to all that wasted paper? Even mostly recycled it's still wasteful and unnecessary. I'd be all for saving the newspapers if they weren't becoming/already cable news, full of opinion and spin, less full of "news".


Posted by Anon, a resident of Another Palo Alto neighborhood
on Jan 20, 2010 at 10:12 pm

Anybody know how much of my Mercury News subscription goes to delivery, how much to printing, and how much to "content"? See, I keep wondering why they give away papers like the Daily and Weekly, but, you have to pay for home delivery of the Merc. Doesn't that imply that a big part of it is the convenience of delivery? How much of the paper's budget goes to printing, and, how much to "content"? The papers all keep complaining about the "free" content they are giving away on the web, but, they also get advertising for that. As far as I know, the "content" has always been paid for by advertisers. And, as a subscriber, if they start charging for content online, I want a the online access included in my paper subscription -- why should I pay for content twice?


Posted by Sharon, a resident of Midtown
on Jan 20, 2010 at 10:21 pm

Maybe someone could explain the economics of the news industry.
We subscribe to the WSJ and the Economist, both of which are showing a healthy profit.
The Financial Times gives you a certain amount of article free per month and then tries to get you to subscribe, this appears to be the model for the NYT moving forward.
What will happen to the news issues like Google and blogs that reference news items? looks like they will be blocked


Posted by Anon, a resident of Another Palo Alto neighborhood
on Jan 20, 2010 at 10:22 pm

Oh, and another thing. Did the holding company get in debt after paying cash for these papers and then running them at an operating loss, or, was it the result of leveraged buyouts and borrowing money to buy these papers? The reason it makes a difference is that it could be the case that the papers operate at a decent profit during normal years (yes, yes, everything is down during a recession), but, the holding company gambled that the papers would be unreasonably profitable. Similar things have happened in many industries, from lumber to energy to Internet companies -- the companies had profitable businesses, but, they couldn't sustain all the debt associated with an unrealistic acquisition sale price. If everyone is overstating their profits, then investors expect unrealistic ROI from all businesses.


Posted by Sharon, a resident of Midtown
on Jan 20, 2010 at 10:46 pm

We thought that it was advertising that drove the news business
It is difficult to see it as a commodity business model like many other businesses become


Posted by OhlonePar, a resident of Duveneck/St. Francis
on Jan 21, 2010 at 12:41 am

Those of you who think blogs simply replace newspaper reporting don't know what you're talking about. The majority of blogs are opinion pieces on reporting done by *somebody else*.

Good reporting takes time and that time costs money. Most blogs make no money and the ones that do make surprisingly little.

While subscriptions cover some costs--the vast bulk of money made by a newspaper comes from advertising. Newspapers and magazines were in severe trouble before the 2008 crash, now things are worse.

Craigslist walked off with classified advertising--remember classified ads? They used to be their own section of the paper. Google and the economy are doing the number on display ads.

While people talk about reading online, print readership, as it happens, has not plummeted. Gourmet, which was closed last fall, had a readership of nearly a million readers. It's all about the loss of ads.

Sharon, what's your source for the WSJ being profitable? According to the most recent (November) report I could find on Murdoch's News Corp, its newspaper unit had seen an 81 percent drop in operating profits.

Yes, Murdoch's been blustering, but, honestly, neither he nor anyone else is going to be able to that tightly control the dessemination of information on the Web.

So, it's a pickle. We're all relying on news produced by traditional journalism, even as the economic infrastructure of journalism falls apart.


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