Seattle Times mulls bankruptcy

Word is, the Blethens have enough cash on hand to keep the Seattle Times operating through at least March, but they’ll reach a major decision point by May:

While a bankruptcy filing is not imminent, if things play out as expected (no last minute reprieve for the P-I, no big concessions from the Times’ unions), Times executives believe a Chapter 11 filing is more likely than not. Such a filing would not necessarily mean the paper is doomed; rather, a Chapter 11 reorganization would buy the paper time, allowing it to continue publishing as it restructured its operations, figured out a way to pay off its debt, and renegotiated its contracts in an effort to make the paper viable when the local economy recovers.

In other words, the Times will use bankruptcy as an opportunity to break the unions.

More from Publicola’s News Junkie.

Comments

  1. 1

    ArtFart spews:

    Anybody know whether Frank Blethen was in on that conference call to strategize union-busting that Bank of America hosted in October?

  2. 2

    spews:

    Goldy says, “In other words, the Times will use bankruptcy as an opportunity to break the unions.”

    No, the quote from PepsiCola was “renegotiated its contracts in an effort to make the paper viable when the local economy recovers.”

    Renegotiating a union contract isn’t the same thing as “breaking the unions.”

  3. 3

    Roger Rabbit spews:

    Yep, bankruptcy is now a corporate strategic planning tool used to bust unions, abrogate pension obligations, wriggle out of contracts, and screw creditors. Of the endless constitutional violations committed by the Bush regime, the constitutional prohibition against Congress passing laws that impair contracts has received the least notice and had the greatest impact on the largest number of people.

    Bankruptcy reform ought to happen this afternoon, not next week. Republicans stood bankruptcy on its head — their bankruptcy law lets the rich go bankrupt to get out of their contracts and screw their workers, but doesn’t let workers and the poor go bankrupt to get out of crushing debts imposed on them by loan sharks in the real estate industry and the protection racket known as the health care industry. I wouldn’t doubt they threw a debtor’s prison provision in there, too! Debtor’s prisons are unconstitutional, but the Constitution never stopped Republicans.

    Don’t get me wrong — I’m not altogether against debtor’s prisons. Who cares if they’re unconstitutional? If Republicans can violate the Constitution, then so can we! Why should they have exclusive violating privileges? I think debtor’s prisons are useful — we gotta have someplace to put employers who break their contractual promises to workers about wages, pensions, and so on. I’m for enforcing the contract clause! Contracts are sacrosanct! You make a contract, you gotta honor it, or we’ll cut off your balls! Violating a pension promise or union contract should be punished by life imprisonment.

  4. 4

    John spews:

    Maybe when the state of washington declares bankruptcy they will be able to bust the unions. Especially the SIEU!

    Is that the real agenda of the queen?

  5. 5

    ArtFart spews:

    Hmph. A little while ago Reuters was carrying a lead story about how a lot of the buzz among the attendees at the World Economic Conference in Davos has been about oh golly gee-whiz, this Wild West unregulated free-market lessez-faire stuff may not be working out so well. Now it seems they’ve pulled the piece, and an accompanying commentary by James Saft.

  6. 7

    spews:

    Goldy, since the Times and P.I. are going away, it’s now up to you to be our region’s investigative journalist.

    So, I’m giving you your first task in this area. Go get a pen.

    Ok, Seattle school parents and advocates are making claims that the school closure list is disproportionately affecting minorities. My homework for you is to get some data on this and find out if it’s true. I want you to research and post on the percentage of minorities who attend the soon-to-be-closed schools, vs the entire school district’s minority percentages.

    And no copy and pasting other reporter’s work. You will do your own research on this.

  7. 8

    Mr. Cynical spews:

    Goldy–
    You are over-reacting….again.
    What you KLOWNS fail to want to understand is how basic capitalism works. People like the Blethens put capital at risk. They expect a certain return on their investment. They certainly don’t expect to lose money. If they are losing money, they must look at their entire business model…no sacred cows.
    Somehow you KLOWNS fail to recognize that. The fact is Labor Costs..including wages, benefits and paid time-off ARE a major cost. It would be irresponsible for them not to explore all costs including Labor. Sadly, when the Union is unwilling to negotiate in good faith and address the losing money current business model, the law only allows them one real option to address this huge cost. BANKRUPTCY.

    Goldy, you and your fellow KLOWNS expect Blethens to continue to lose money…like they OWE Seattle a newspaper NO MATTER HOW MUCH MONEY THEY LOSE!

    Pinheads.

    That’s not how the real world works.

    How about if the Seattle Shitty Klowncil takes over the newspapers…they can call it TASS.
    That’s where things are headed….wipe out the private sector and have government take over dang near everything. Why not the newspapers?

  8. 9

    ArtFart spews:

    8 “That’s where things are headed….wipe out the private sector and have government take over dang near everything. Why not the newspapers?”

    Well, why the hell not…if “private enterprise” can’t do a better job than it’s been lately.

    It might be an even better idea for the gubmint to help the folks who’ve been doing the real work and the customers who use the results take over and run things? Seems to have worked pretty well for Group Health, PCC and REI.

  9. 10

    headlesslucy spews:

    Maybe Rupert Murdoch will buy the ST. Then we can get the important news New York Daily readers are getting!

    Troll, did you know that JFK has returned from outer space with a great new diet? That’s gonna put all those nutty conspiracy theorists out to pasture.

    Limbaugh refuses to go on the diet. He says it’s a LI—-BER—–AL diet and we live in a CA—PI—-TAL—IST society. Wow!!! What a brain trust that guy is.

    Haven’t heard much from you guys lately about the ‘marketplace of ideas’. Like Jesus at the temple, we’ve routed you assholes from the premises.

  10. 11

    Roger Rabbit spews:

    @4 Cutting off the flow of L & I tax money into BIAW’s political slush fund is a much better idea. That money is supposed to pay for medical benefits and lost wages of injured workers, not lying Republican ads demagoguing the sex offender issue.

  11. 12

    Chris Stefan spews:

    My bet, Hearst buys the Times once the Times files bankruptcy.

    Due to the JOA Hearst has a better view inside the Times finances than anyone other than the Blethens and McClatchy (49.9% owner).

  12. 13

    ratcityreprobate spews:

    It is probably impossible for the Times to obtain any sort of outside financing today. If they put off a bankruptcy say for four or five more months and a half a dozen or more large dailies go out of business ala the PI no lender in their right mind would step up to provide DIP financing (Debtor in Possession). They would still be SOL and have burned through four more months worth of Blethen cash. They are in a real bind.

    DIP financing is a feature of Chap 11 bankruptcy that permits a lender to provide operating moneys to a bankrupt company taking a priority over the existing creditors. But now the situation nationally for papers is so ugly that even getting a priority provides no comfort for a potential lender.

    Another interesting question will be what happens to the PI circulation. Will PI subscribers start subscribing to the Seattle Times? Well probably some but many, perhaps most, will not. Then the Times will have the problem of spreading their fixed costs over a much smaller total press run.

  13. 14

    Roger Rabbit spews:

    @8 “What you KLOWNS fail to want to understand is how basic capitalism works. People like the Blethens put capital at risk.”

    No, Cynical Klown, what YOU fail to understand is how capitalism really works. The idea is to put OTHER PEOPLE’s money at risk — shareholders, or better yet, taxpayers — and take all the profit. They get the risk, you get the profit, that’s how a real capitalist operates! It’s the same with costs. The objective is to transfer as many of your business’ costs to innocent victims as possible. For example, instead of spending $40 million to install scrubbers on your smokestake, you invest $4 million in Republican candidates who let you dump your arsenic into the air, where it kills children in the surrounding community. And if you’re a really good businessman, you also own all the funeral parlors in the area, and charge monopoly prices for children’s funerals! That way, you get to double-dip.

    Let me give you 3 examples of how your “basic capitalism” works.

    Example 1: Cabela’s, a retailer of hunting, fishing, and camping gear. Their margin on retail sales isn’t very good, but it doesn’t have to be, because they make most of their profit by extorting local communities. Typically, they get $50 million or $60 million for building a store that costs about $30 million and pocket the difference, in return for hiring a few dozen people at minimum wage. In sum states, they’ve even managed to negotiate deals that let them collect — and KEEP — sales taxes for the next 40 years! With a pipeline like this into taxpayers’ pockets, they don’t have to sell a damn thing to make money, in fact, they’re better off if they don’t because then they can lay off all those minimum wage workers and eliminate their labor costs! This business model is so good I bought hundreds of shares in Cabelas — this ripoff is too juicy not to own a slice of it.

    Example 2: Gold mining companies. Back when gold was selling for $300 an ounce, these companies dug it out of the ground at a cost of around $600 or $700 an ounce and pocketed fat profits. How? By dumping the hundreds of millions of dollars it costs to clean up the superfund sites they create on taxpayers. The miners typically were paid pretty well, at least compared to other jobs (if there are any) in the isolated, economically depressed, areas where virtually all gold mines are located. This guarantees these pickaxe handle-wielding rednecks will run off any environmentalists who show up to complain about tearing up the landscape, dumping tailings into fish streams, creating sulphuric acid lakes that will leach poisons into the soil and aquifer for thousands of years to come, and spewing cyanide into the air.

    Example 3: In Michigan, an appliance manufacturer demanded the state pay his workers’ wages, and threatened to fire all the workers and move his plant to Mexico if it didn’t. The company was profitable, but the owner simply felt his labor costs should be transferred from him to local taxpayers so he could make even more profit, and held his workers’ jobs as hostage for public subsidies. The state refused, so he did what he said he’d do, he fired all his American workers and moved his manufacturing operation to Mexico, where he pays his Mexican workers $1.25 a day. He got some tax breaks for moving out of the country, too.

    Anyone who thinks contemporary capitalism is about competing by making better products and discovering efficiencies in order to sell them at a lower price so everyone can share in the wealth is as ignorant as Cynical Klown! No one makes money that way anymore. Today, capitalism works by gaming the tax system, cutting wages, bankrupting pension obligations, and moving jobs overseas.

    Of course, where it all falls apart is, after you’ve destroyed your workers’ incomes they’ve got no money to buy your goods and services, and you go out of business because all your customers have disappeared. But CHEAP LABOR CONSERVATIVES are too dumb to figure out the goose they just cooked ain’t gonna lay any more eggs.

  14. 15

    Roger Rabbit spews:

    @12 Wouldn’t be the first time a too-clever businessman outsmarted himself by filing for bankruptcy to stiff his creditors and workers, only to have his company snatched out of his hands by a wily competitor who comes in through the side door with a bid the trustee likes. I’ve seen it happen! Bankruptcy strategies aren’t without risk.

  15. 16

    Roger Rabbit spews:

    @13 Yeah, I think the fishwrapper is toast. So is the Blethen family fortune. Look for Frank B. hawking copies of “Real Change” at 3rd and Pine by September in a futile attempt to maintain the mortgage payments on his $4 million Lake Washington mansion.

  16. 17

    Mr. Cynical spews:

    9. ArtFart spews:

    8 “That’s where things are headed….wipe out the private sector and have government take over dang near everything. Why not the newspapers?”

    Well, why the hell not…if “private enterprise” can’t do a better job than it’s been lately.

    It might be an even better idea for the gubmint to help the folks who’ve been doing the real work and the customers who use the results take over and run things? Seems to have worked pretty well for Group Health, PCC and REI.

    Spoken like a true Socialist AF!!
    Socialism ALWAYS collapses because we are human beings with goals & desires…not robots.
    Go ahead & use Group Death…or spend extra $$ shopping at REI..or the Co-op. Good for you…if it works for you.

  17. 18

    Mr. Cynical spews:

    Rog Rabbit–
    Gosh you are a bitter old codger.
    I guess spending 30 years at DSHS splitting up families and defending incompetence can do that to you.
    Also, your one & only crack at capitalism, your AMWAY Distributorship, obviously failed because you are such a cranky old bastard no one wanted anything to do with you.

    I can understand your resentment with business in America….it’s based on your own failures.

  18. 20

    ArtFart spews:

    Possibly Blethen’s thinking if his company files Chapter 11, it’ll scare McClatchey badly enough that they’ll sell their half to him and his kids for next to nothing. More likely, they’ll sell to someone else (like Hearst) or sue the shit out of him and take over the whole shootin’ match.

  19. 21

    ratcityreprobate spews:

    @20
    McClatchey is also on the ropes, so they would probably take any offer for their Times shares now. They have already written down their $120 million investment to $8 or $9 million.

    If they sold their shares to Rupert Murdoch, Blethen would have a coronary, even to Hearst would probably to the trick.

  20. 22

    John425 spews:

    So if a bankruptcy will break the unions the obverse must be true- unions bankrupted The Times.

  21. 23

    Mr. Cynical spews:

    John425–
    Excellent logic my friend.
    We are kind of whistling in the wind trying to reason & educate these Atheist Progressives. You can reason & reason…but because they lack certain necessary faculties to process information, all they can do is hurl vulgar insults.
    Most of them could never make it in the private sector, like Rog Rabbit…so they have to rationalize their “life at the trough”.
    It’s pretty pathetic. Envy & jealousy of those who have succeeded. Of those who have the courage to take risks and have everything they own on the line 24/7. Of those who create jobs and create wealth.
    Endless jealousy.

    They have all congregated at this cesspool hoping their LEFTIST PINHEAD Circle-jerking might give them some relief…add some meaning to their pathetic lives.
    There #1 quality is whining.
    Perpetual whining.

    Obviously they have no concept of risk/reward or understanding what it takes to run a business these days….nor do they want to understand.
    They want the goovernment to coddle and guarantee them a certain lifestyle thru either handouts…or worthless careers like Rog Rabbit’s as a DSHS Attorney filled with breaking up families and defending DSHS incompetence in Court. Not much meaning there, is there?!!
    Rog can say he spent his career defending an inept, incompetent bureaucracy…causing them to perpetuate their incompetence.
    Rog has the blood of many kids & families on his paws….and he knows it.

    This is why you get his twisted diatribes. It’s sadly all he has left to give. Gasbagging.

  22. 24

    correctnotright spews:

    @23: hahaha cynical is the professional WHINER on this blog. He and his republican cohorts whine about taxes and spending and whenthey get a President who does what they want for 8 years – what do they do?

    Do they accept responsibility for the guy they camapigned for?

    Do they accept repsonsibility for the economy after 8 years of Bush and the republicans running roughshod?

    No – the pussies whine and try to shift blame on the democrats. What a bunch of whining babies!

  23. 26

    headlesslucy spews:

    re 22: If a soldier died in a war, then the obverse must be true, the soldier killed the war.

  24. 27

    Politically Incorrect spews:

    I just can’t wait for roger to get to the part about “Workers of the world unite! You have nothing to lose but your chains.”

    On a lighter note, does it really matter is Seattle has a newspaper? If both the PI and Seattle Times fold, what difference does it make?

    It certainly won’t matter to those of us in Pierce County.

  25. 28

    Roger Rabbit spews:

    @18 “your AMWAY Distributorship, obviously failed because you are such a cranky old bastard no one wanted anything to do with you”

    No, it failed because there are 8,143 other Amway distributors working my territory. Amway is a fucking pyramid scheme. A chain letter. The last housewife who opened her door to me had her living room stacked to the ceiling with cleaning products and air fresheners. What the hell is a rabbit supposed to do in a situation like that? You’d be cranky, too, if that happened to you.

  26. 29

    Roger Rabbit spews:

    @28 That reminds me. I got a telemarketing call a couple days ago. I don’t know why, because I’m not only on the “Do Not Call” list, I don’t have a phone, either. (I poach internet access from the wireless cafe across the street from Green Lake Park.) So I don’t know how in hell the guy got ahold of me.

    Anyway, he started his pitch with, “Mr. Rabbit, I’m so-and-so who e-mailed you the other day about insurance for your business …” and that’s as far as he got before I interrupted him and said, “I don’t have a business, I don’t need insurance, and I didn’t get your e-mail.” All he managed to say before I hung up was, “Wow!”

    I thought that was kinda funny, so I didn’t report him. He could’ve been fined $10,000 if I had.

  27. 30

    Roger Rabbit spews:

    20, 21 Man at the rate these rich folks burn through money, they gotta be rich just to afford being rich.

  28. 31

    Roger Rabbit spews:

    @22 And if elephants have babies, babies must have elephants, right Mr. Genius?

    Another dazzling display of wingnut logic.

  29. 32

    Roger Rabbit spews:

    @23 Of course I know what it takes to run a business, Cynical Klown. That’s why I opted for a career as a gummint lawyer. And that’s why I’m sitting here on my fat warm rabbit ass doing no work and munching on fresh carrots while you sit there in your plywood shack in Montana thawing frozen goat jerky over a candle.

  30. 33

    Roger Rabbit spews:

    @24 Cynical Klown’s problem is he has to live off his INVESTMENTS because he doesn’t have a GOVERNMENT PENSION like I do. I bet he didn’t imagine in his worst nightmares what the Republican assholes he’s been voting for all these years would do to him when they got their greasy paws on the financial system!

    Cynical Klown must dread opening his brokerage statement every month! Me? I have a GOVERNMENT PENSION, and I mail checks to my broker, not the other way around.

    HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR HAR

  31. 34

    Roger Rabbit spews:

    @27 No, it won’t make any difference to those of you who never read newspapers anyway.

  32. 35

    Politically Incorrect spews:

    @34

    And it won’t make any diff to those of us in Pierce County. You see, the Tacoma News Tribune will become the dominant paper in Western WA. I bet that just galls the shit out of you effete Seattle snobs!

    BTW, I read the TNT pretty much every day.

  33. 36

    Marvin Stamn spews:

    In other words, the Times will use bankruptcy as an opportunity to break the unions.

      
    What is more important…
     
    1. A newspaper being solvent and putting out the paper
     
    2. Support for overpaid union workers
      
    Maybe if goldy ever gets into a position of actually being responsible for paying his employees he will understand the problem with unions. As long as he’s some poor guy begging for donations on his blog he will never get it.