Journal Register Co. files for Chapter 11
The Journal Register Company will seek protection under Chapter 11 “and will seek to implement a prompt sale,” according to Digital First Media head John Paton. The U.S. newspaper company, known for its Digital First strategy, has already attracted interest from an investment group affiliated with Alden Global Capital.
“I am pleased to tell you the Company has a signed stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC,” Paton wrote on his blog.
A stalking horse bid is an initial bid on a bankrupt company’s assets from an interested buyer chosen by the bankrupt company.
Should staff be worried? Paton says no, it’s business as usual. “Journal Register Company’s filing will have no impact on the day-to-day operation of Journal Register Company, Digital First Media or MediaNews Group during the sale process. They will continue to operate their business and roll out new initiatives,” he writes.
So why file for Chapter 11? Paton explains how the company exited the 2009 restructuring with approximately $225 million in debt. Print ad revenue has slumped 19 percent rom 2009 to 2011, and print advertising represents more than half of the of Journal Register’s revenues.
Digital revenues have soared, growing 235 percent between 2009 and 2011. But it’s not enough to make up for the print ad loss, Paton writes.
“And while I get this news may make some of you nervous, don’t let it. Concentrate on the job at hand and we will work through this,” he concludes.
When Journal Register last filed for bankruptcy in 2009, James W. Hall, the CEO at the time, promised it would emerge “stronger, leaner and more financially viable in the current environment,” Poynter writes.