Dailies Dealing With Debt
Daily newspapers are now, more than ever, laboring under large clouds of debt.
With the Tribune Co. filing for bankruptcy, other companies such as the New York Times Co. and Gatehouse Media are busy telling analysts and investors how they’ll deal with their own debt issues.
The Tribune Co. has $8 billion in debt. It owns eight daily papers, including the Chicago Tribune and some television stations.
The New York Times Co., which owns the Boston Globe and the Worcester Telegram & Gazette, is talking with its lenders about its debt. It has $250 million due in 2010 and a $400 million due in May of 2009, with another $400 million due in 2011.
It also wants to borrow up to $225 million against its new Times Square headquarters, which it will use to pay down long-term debt.
But the New York Times is certainly not alone. Gatehouse Media, based in Fairport, N.Y., has almost $1.2 billion of total debt. The company has eight daily newspapers in Massachusetts, including the MetroWest Daily News, as well as 80 or more weekly publications. It has many daily and weekly papers across the country.
Boston Herald Publisher Pat Purcell previously owned the group, which he bought from Fidelity Investments, when they were called the Community Newspaper Co. Purcell sold the papers in 2006.
This past June a financial blog, 247WallSt.com, predicted earlier this year that the company would be broken up by the end of the year or file for bankruptcy, and at about the same time the Motley Fool listed the company as one of five “deathbed” stocks.
Moody’s Investor Service, which rates companies on their finances, cut Gatehouse’s ratings, citing doubt that the company could service its debt and its shares dropped over 20 percent in value on Monday, Dec. 8.
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