New Britain (Conn.) Herald closing up shop

Greed is bad. Newspapers had been great for 30 percent profit margins. Now, it's dropped to 10 with the real world and people are losing their damn minds, and jobs.

 

actually, if papers eliminated the debt service they have for the papers they have recently purchased, then almost all companies would be super profitable. Most places are still printing money, but just not enough.
McClatchy is a perfect example, by snapping up the old Knight-Ridder papers, they took on more debt then they could handle.
The same is true for Tribune. When Zell and the boys bought in, they projected ad revenue to stay relatively stable and then sell off more profitable aspects of the business. Real estate. Sports teams. Instead, ad revenue has tanked and with the credit problems, people can't get financing to buy the other properties.
So the newspaper aspect of the business is waiting it out.
In the meantime, newspapers continue to give away its product for free on the internet.

So it really doesn't have anything to do with profit margins. It has to do with debt service. The margins don't matter as much as you might think.

 

By E&P Staff

Published: November 11, 2008 10:55 AM ET

NEW YORK The Journal Register Co. said it will have to close two of its newspapers in Connecticut unless a buyer is found by January.

It is not clear if there are any interested parties in the Bristol Press and The Herald of New Britain, reports the Hartford Courant.

An unnamed employee of Journal Register told the Courant that the company's other three Connecticut dailies -- The New Haven Register, The Middletown Press, and The Register Citizen of Torrington -- are "profitable" and "will continue to publish."

The Courant obtained a memo from the publisher of the Bristol Press and the Herald Edward Gunderson who wrote, "In the event that there is no buyer, then we anticipate that the facility will be shut down. ... You will not have the right to displace other employees."

Roughly 50 to 60 employees could be affected.

Journal Register owns 22 dailies and hundreds of non-dailies in the U.S. The company has been beset by high debt levels and falling advertising revenue. Journal Register was also kicked off the New York Stock Exchange.

 

The blurb I saw on Romenesko said the employees had to sign something saying they understood what was told to them in the meetings. Is that a regular happening?

Actually from the Hartford Courant ... http://www.courant.com/community/news/nb/hc-jrc1111.artnov11,0,6617024.story

 

What's not to understand? You're job is closing. Don't need a blackboard for that.

 

Wow (from that link)

 

I would think, that unless there was some sort of incentive, like severance packages, I don't see why anyone would have signed that statement. What would they do, fire you if you didn't sign?

Granted again, this is JRC we're talking about here.

 

This shows how incompetent the paper is. The news that they were closing, WAS BROKEN IN THE COURANT.

How do you get scooped about your own closing? Don't you think that deserved a front page story to your readers? What happens if they don't get the Courant? I would immediately stop paying for the darn paper.

Sorry state of the industry.

 

In my chain, there are two weeklies for two towns about 10 miles apart. The office in the smaller town was closed and reporters for that paper now have to either waste a lot of time driving or do a lot of phoners.

I think the phoner option is what the reporters are choosing.

I just don't see how smaller areas can support a paper when the beancounters can say that instead of 10 people reporting for two papers, what about 7 who would work at one paper covering the two towns.

 

Actually, this shows the level of mismanagement there must be at JRC. Induustry wide, the small,, community papers are the ones doing best and least impacted by the downturn. Given all I have heard about that company, I would think this is a situation that reflects on its problems more than it reflects on the industry's problems.

 

As Jay said nicely, they are up the ass in debt. That's the reason why this happens. They probably still haven't paid off their purchase of the Middletown paper 12 years ago -- JRC just kept rolling that debt over.

The sad thing is, Zell and his minions will make some minor gains from this. And the rate Sammy boy has been treating his help lately, I hate, hate seeing that happen.

Are these papers great bastions of journalism? Hell no. But they had a sizable (not significant) amount of readers in their communities who will get ignored and lost in the shuffle once they go under.

(Also mentioned in the AP story is how people at the associated group of weeklies linked to this cluster also are getting shown the door, if the papers aren't sold.)

 

what's your bottom line, stitch? will you give me a "therefore ..."?