The Saratogian's Parent Company Files for Bankruptcy
The Journal Register Company, the parent company of The Saratogian and The Troy Record as well as owner of newspapers in ten Midwest and Northeast states, announced on Wednesday that it has filed for bankruptcy. This is the second bankruptcy for the company in three years.
Officials with Digital First Media, the company that manages both the Journal Register Company and another newspaper chain, the MediaNews Group, say the move is an effort to deal with “unsustainable liabilities,” including defined benefit pensions and leases.
Here the story becomes a bit more complicated. Alden Global Capital is a New York hedge fund. It owns Journal Register, the MediaNews Group, and Digital First. Alden also has a newly-formed affiliate called 21st CMH Acquisition Company. And 21st CMH has already made what is called a stalking horse bid to buy the Journal Register Company at a bankruptcy auction expected to take place within 90 days.
So effectively the company owning the Journal Register Company is placing it into bankruptcy in order to purchase it back, minus at least a portion of its current debt load.
Traditional media companies have faced a major downturn in ad sales over the past ten years. Newspapers sold $49.5 billion in ads in 2005, according to San Francisco-based media analyst Alan Mutter. That figure, he says, dropped to less than $24 billion by 2011. “And sales are down 6.5% in the first half of this year.”
So the goal of this bankruptcy filing, says Mutter, is getting a healthy media company moving forward. “This strips away all kinds of expenses that they can’t handle with the current downturn in the media industry.”
It’s not clear what this bankruptcy will mean for the two local Journal Register newspapers. When reached for their reaction, several Saratogian employees said only representatives from the parent company can comment. And Jonathan Cooper, Journal Register’s Vice President of Media Relations, spoke only long enough to say he would call back, which he has not done.
However, in a release announcing the bankruptcy filing, Digital First said daily operations will continue until the auction occurs, with current management remaining in place. “Offices, newsrooms, sales teams and publishing continue working. Employees are paid and goods and services purchased after the filing date are paid for in the ordinary course of business,” according to the same release.
After the sale is complete though, the release says the decision about any current jobs will be up to the ultimate purchaser.
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