Times on Columbian’s bankruptcy: it’s not the economy, stupid

A few days back I suggested that newspaper publishers should take personal responsibility for their own bad business decisions, arguing that as poor as industry fundamentals may be, it’s the mountain of highly leveraged debt, not operating losses, that threatens to crush many of our daily newspapers.  And as an example, I pointed to two of Washington’s most prominent struggling dailies.

While the whole industry is struggling, the financial precariousness of some of our most threatened papers is at least partially due to the awful business decisions of their owners, in particular, the incredibly over-leveraged position they find themselves in as a result of ill-advised acquisitions and other bone-headed ventures.

For The Columbian, it was the construction of a new $40 million office tower that landed a shrunken newsroom back in its old digs, and publisher Scott Campbell in bankruptcy court.  For The Times, it was Frank Blethen’s ill-fated foray into the Maine media market that has left him with a couple hundred million dollars of debt coming due, and no obvious means of raising more capital.  Both papers are currently losing money on their daily operations, but neither would be struggling to survive this particular recession if the bankers weren’t pounding at their doors.

As usual, my trolls took issue with my analysis, arguing that I was bucking conventional wisdom simply to take another potshot at my friends at The Seattle Times. Uh-huh. So I’m guessing they’ll probably be disappointed to read the unsigned editorial in today’s Times, that picks up on my basic premise in arguing that the bankruptcy of the Columbian is “different” than that of debt-laden giants like The Philadelphia Inquirer and The Los Angeles Times:

Like every newspaper, the Columbian’s advertising revenue has been whacked by the recession. Unlike larger companies such as Philadelphia and Tribune, the Columbian’s push into Chapter 11 does not stem from a debt-laden purchase of newspapers.

The Campbell family, three-generation owners of the Columbian, took on debt to help revitalize downtown Vancouver by constructing a new building. The newspaper quickly moved back to its old building because of the recession. Now Bank of America is calling in its loan of about $17 million — a pittance compared to what other newspaper companies owe.

What makes the Columbian’s plight so sad is that Southwest Washington could lose its dominant news provider because Bank of America is apparently not willing to work with the company. This is a newspaper that in ordinary times would be doing well and will likely do well after the recession.

Forget for a moment the Times’ effort to spin the Campbell’s ill-fated real estate speculation as an act of civic engagement; what’s important here is that The Times acknowledges my core thesis… that it is debt, not operating losses, that threatens both the Columbian and its larger cousins.  The Times also confirms that it was the construction of its new/old headquarters that ultimately pushed the Columbian into bankruptcy, not the Great Recession, or the fundamental weakness of the newspaper industry itself.

Of course, what we don’t see from the Times is a mention of their own poor business decisions, or an admission that they and their friends at the Columbian should take any personal responsibility for the current sorry state of their respective family businesses.  On the contrary, the Times paints evil, Bank of America as the bogeyman for demanding that the Campbells actually make good on their debt, according to the terms contractually promised.

The Times solution to The Columbian’s mismanagement of their own finances?  Appeal to gov’ment to force BoA to renegotiate the loan.

The U.S. Senate Commerce Committee is holding a hearing today about the future of journalism. This hearing and the Columbian’s plight should grab the attention of the governor, the state Legislature and our federal delegation.

The time is right for politicians, journalists and the public to start working toward preserving an independent press.

One can’t help but wonder if this is a preview of the arguments the Times will make on its own behalf should it seek bankruptcy protection later this year… that the government should use its bailout accrued leverage to force financial institutions to renegotiate terms with struggling newspapers, in the interest of preserving an independent press?

Irony aside, I’m not necessarily opposed to the government doing exactly that.  It would be a shame to see Southwest Washington lose its only major daily, just as much as it would for Seattle to become our nation’s largest no-newspaper town.

But as a condition of any such government-brokered bailout, I’d want to see a genuine public admission from the likes of the Blethens and the Campbells of their own culpability in their respective paper’s near demise—not out of vindictiveness or a craving for public humiliation, or even the hope that acknowledging their own plight might moderate their editors’ demands for less government and more personal responsibility—but because self awareness is the first step to recovery.  For the most effective thing we can do to prevent newspaper publishers from repeating their own mistakes of the past fifteen years is to force them to admit these mistakes to themselves… something the Times, if today’s bankers-as-villains editorial is any indication, simply isn’t ready to do.

Comments

  1. 1

    ArtFart spews:

    It might be pointed out that the present perils of the Tribune Corp. stem from a perfect-storm combination of the papers’ debt load, Sam Zell’s delusion that he knew better than anyone else about the media business, and his own real estate holdings going in the tank.

  2. 2

    Mr. Cynical spews:

    Goldy–
    If the Columbian fails, someone else will fill the void with more capital and a much better business model.
    It’s capitalism for cryin’ out loud.
    What is happening is that everyone wants to be guaranteed they cannot fail.
    It’s ludicrous.
    I have been against the bank and auto bailouts…and I’m against all other government intervention.
    It will all eventually catch up with us.

    Don’t reward bad decisions.
    Let folks be free to FAIL!

  3. 3

    Marvin Stamn spews:

    2. Mr. Cynical spews:
    Don’t reward bad decisions.
    Let folks be free to FAIL!

     
    If obama was president back in the late 50’s we would all be driving edsels today… and we would like it or else.

  4. 4

    Roger Rabbit spews:

    Well, well … nowadays Blethen Republicanism means asking gummint to tell private banks how to run their businesses. Who wudda thunk?

  5. 5

    Roger Rabbit spews:

    Roger Rabbit doesn’t have a Bank of America problem, because Roger Rabbit doesn’t owe any money to BoA … or anyone else. I’m an Owner, not an Ower. Banks pay me interest, not the other way around. Although quite frankly, I don’t much like their business model — they borrow money from savers like me at 1/2% interest and loan it out to credit card debtors at 28% and pocket the difference — so I keep minimal savings in banks and put most of my money into stocks. Especially oil stocks! Crude prices rose sharply today, as a result of which I’ve made $386 in the stock market today (last time I looked), which based on an 8-hour day is $48.25 an hour. That sure beats working for $9 an hour PLUS I get a 2/3rds tax discount for not working! Yeah, I know oil is a dirty business, but while it exists someone has to make money off it, and I’m a craven golddigger like Cynical and Stefan, so it may as well be me. It sure beats working! I don’t work, and I don’t see why anyone does under our crazy tax system, which rewards stock speculation and punishes working. I didn’t create this vicious system; I’m merely going with the flow.

  6. 6

    Roger Rabbit spews:

    Republicans, who deign to lecture the rest of us about personal responsibility and fiscal rectitude, make their money off other people’s savings and other people’s labor; and when they overextend themselves they blame others, demand tax breaks and pulic welfare, and if all else fails they rush to bankruptcy court to repudiate their pension obligations, union contracts, bank loans, and promises to creditors and shareholders. What a bucket of slime these people are!

  7. 8

    Roger Rabbit spews:

    23 If Obama was president back in the 50s you’d be driving an electric car with fuel costs equivalent to 99-cent gasoline (2009 dollars) and the Antarctic ice shelf wouldn’t be breaking up.

    Of course, sitting on an investment portfolio full of oil stocks, I don’t mind a bit profiting from your stupidity. Thanks, sucker! I appreciate your business.

  8. 10

    ByeByeGOP spews:

    I wonder how the real black people who worked for civil rights in this country back in the 50s would feel about a self-loathing, sellout Oreo like Puffybutt sucking GOP cock every chance he gets?

  9. 12

    Mr. Cynical spews:

    8. Roger Rabbit spews:

    23 If Obama was president back in the 50s you’d be driving an electric car with fuel costs equivalent to 99-cent gasoline (2009 dollars) and the Antarctic ice shelf wouldn’t be breaking up.

    He was born in 1961 Rog you Bozo.
    If he were President before he was born, we would have the best pro-life, anti-abortion argument of all-time.

    Actually, God did know all of us…even before we were conceived. How great is that!

  10. 13

    ArtFart spews:

    12 “God did know all of us…even before we were conceived. How great is that!”

    Pretty great, as a matter of fact. If in spite of that He can put up with you, I guess the rest of us should at least try.

  11. 14

    spews:

    That idiot Cynical thinks he’s putting it to RR by complaining about pre-birth presidenting. I wonder why he hasn’t said a peep to fellow idiot Marvin, who initiated the “if Obama was president back in the 50s” thing several comments above Roger’s.

    Of course, in Cynical’s faith-based world, I suppose comment #8 could have appeared prior to comment #3.

  12. 15

    correctnotright spews:

    God would surely be ashamed of a lying sack of sh#$ like Klynical who has no compassion for the poor but lot of excuses for the rich.

    God would also be ashamed of all the lies and defamation and false rumors that Klynical tries to spread.

    In summary, Klynical is a godless fool.

  13. 16

    spews:

    re 11: In the book, Uncle Tom’s Cabin, Uncle Tom was a metaphor for Jesus Christ — a heroic if humble figure.

    In that sense, the PudWaxxer is nowhere near being an Uncle Tom. He’s more like Clarence Thomas — a self-loathing freak.

  14. 17

    spews:

    re 13: We were all and shall be asleep in the rock of ages — as Gordon Lightfoot pointed out many years ago. — remember the unborn children yet to come.

    Some say Lightfoot was God’s own modern day stenograper. I believe it. It must be true.

  15. 19

    Mr. Cynical spews:

    13. ArtFart spews:

    12 “God did know all of us…even before we were conceived. How great is that!”

    Pretty great, as a matter of fact. If in spite of that He can put up with you, I guess the rest of us should at least try.

    You are a real blessing to this cesspool AF.
    BTW, how do you put up with the endless vulgarity and sickness posted by Kommodore/Kountry Klubber steve and his mentally ill sidekick, ByeByeGoober??
    It must be a real challenge to look the other way.

  16. 20

    Roger Rabbit spews:

    @12 If you don’t like the premise of the hypothetical, complain to Stamm about it — he invented the hypothetical. See #3, idiot.

  17. 21

    ArtFart spews:

    19 It’s pretty easy to forgive strong language when it’s elicited by sincere outrage. In fact, I have a harder time with those who remain silent in the face of that which truly offends them.

    There are lots of things going on all around us which someone with a true sense of morality should find far more obscene than four-letter references to reproductive or excretory functions, or even to God, to say nothing of the occasional glimpse of naughty bits.

  18. 24

    Steve spews:

    @19 “BTW, how do you put up with the endless vulgarity and sickness posted by Kommodore/Kountry Klubber steve and his mentally ill sidekick, ByeByeGoober??”

    Posted by a guy who ignores manoftruth spewing streams of Jew-Hate, Troll, who spews “nigger” comments, and KIKE KILLER, who’s name says it all.

    One of the many things I find disgusting about you, Mr. Klynical, is your situational values. In other words, it’s all good when the hate comes from you and yours. Until you find yourself a moral compass, Mr. Klynical, you can store that judgemental bullshit attitude of yours where the sun don’t shine.

  19. 25

    ByeByeGOP spews:

    Simple offer. $1000 cash for information leading to the exact whereabouts of CYNCYN. All I need to know is who and were this ass-licker is.

  20. 26

    Marvin Stamn spews:

    20. Roger Rabbit spews:
    @12 If you don’t like the premise of the hypothetical, complain to Stamm about it — he invented the hypothetical. See #3, idiot.

     
    Thanks rabbit.
     
    I thought the hypothetical was invented way before I was born, but maybe you’re right.
     
    Since I invented it, anyone on this blog using it will have to pay royalties.
     
    Hey rabbit, want to be my lawyer and profit off the ha hooligans?

  21. 28

    Marvin Stamn spews:

    24. Steve spews:
    One of the many things I find disgusting about you, Mr. Klynical, is your situational values. In other words, it’s all good when the hate comes from you and yours. Until you find yourself a moral compass, Mr. Klynical, you can store that judgemental bullshit attitude of yours where the sun don’t shine.

     
    I would like to take a moment here to introduce mr. pot to mr. kettle.
     
    Do you understand what that means steve? Translated, you and byebyegoober are the last 2 people that should be talking about others spewing hate.
     
    Considering your IQ is significantly higher than byebyegoober, you have no excuse.
     
    Here’s a clue, you goatfucking faggot cunt. Our calling you a faggot cunt is not to belittle gays and women. It is to belittle you, you worthless goatfucking faggot cunt piece of shit.
    05/05/2009 AT 8:46 PM
    http://horsesass.org/?p=15786&.....ent-916253

  22. 29

    Puddybud is shocked SHOCKED spews:

    Hey stillbentover: Good news for Fox News, bad news for stillbentover…

    “Cable Network Programming reported third quarter operating income of $429 million, an increase of $99 million over the third quarter a year ago. This 30% growth was driven by higher contributions from the FOX News Channel, the Big Ten Network and the Fox International Channels.

    The FOX News Channel (FNC) almost doubled its operating income versus the third quarter a year ago, primarily from increased affiliate revenues on higher rates. In the quarter ended March 31, 2009, FNC primetime ratings were up 23% compared with the same period a year ago. The Fox International Channels increased its earnings contributions by 25% over year ago levels driven by continued advertising and affiliate growth in Latin America and Europe. The Big Ten Network achieved its second quarter of profitability, having gained distribution on all major pay-TV platforms in the Big Ten markets. Contributions from the Regional Sports Networks were down for the quarter as increased affiliate revenue was offset by the absence of contributions from the three regional networks that were divested in February 2008. ”

    So Puddy wonders where did stillbentover get that crap yesterday?

  23. 30

    Puddybud is shocked SHOCKED spews:

    Did ya notice June oil price futures are at $56.00? I thought the “messiah” would make the prices drop?

  24. 31

    ByeByeGOP spews:

    Puffybutt I don’t see a link for the shit you post. What happened to Puffybutt always uses links? The 56% revenue drop is not month v. month it’s total revenue this year v last and it’s in their own SEC report which if you weren’t the cum-drunk Oreo you are, you’d know how to look up.

  25. 32

    Marvin Stamn spews:

    29. Puddybud is shocked SHOCKED spews:
    Hey stillbentover: Good news for Fox News, bad news for stillbentover…

    “Cable Network Programming reported third quarter operating income of $429 million, an increase of $99 million over the third quarter a year ago.

    But byebyeboober said they lost money.
     
    Of course byebyebooger never provides links to prove anything he says so it’s safe to assume he’s a pathological liar.
     

    31. ByeByeGOP spews:
    Puffybutt I don’t see a link for the shit you post.

    Not only is byebyebooger a liar, he can’t even read. Puddy provides a link at #29 and byebyegoober can’t even figure it out.

  26. 33

    ByeByeGOP spews:

    I like the way that Marvin the child rapist refers to the GOP as GOOBERS! For once we agree on something.

  27. 34

    Steve spews:

    I see that today’s Rasmussen Daily Tracking Poll has the Presidential Approval Index at +8, a 700% increase over last Friday! Our president’s approval continues to skyrocket, increasing with each passing day! Of course, this glorious news sucks for our America-hating, treasonous trolls who want America to fail. They placed their bet against America – bad move. They lose.

    Oh, and did I mention that Marvin’s a little faggot?

  28. 35

    Oswald Spengler spews:

    re 34: He should get married and settle down — maybe adopt a few kids. “A boy for me and a boy for you!”