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.
Digital circulation for U.S. newspapers rose 63%
U.S. newspaper circulation struggled with only a tiny increase in March 2012, compared to a year earlier, but digital circulation surged by 63 percent, according to the latest figures from the the Audit Bureau of Circulations.
Digital circulation now accounts for 14.2 percent of newspapers’ total circulation mix, and note the term refers to tablet or smartphone apps, PDF replicas, metered or restricted-access websites, or e-reader editions. The figure in March 2011 was 8.66 percent.
Average daily circulation increased .68 percent, covering 628 papers.
The Grey Lady was one of the clear winners from this report. The New York Times enjoyed a 73 percent surge in circulation to 1.58 million, with digital readership of 807,026 overtaking print circulation of 779,731. The Times remained the top Sunday newspaper with total average circulation of just over two million, including more than 737,000 digital.
Coming out as one of the top losers, The Washington Post faced a 7.8 percent circulation decrease, a trend closely mirrored by the Detroit Free Press (6.27 percent decrease).
AFP writes, “US newspapers have been grappling with a steep drop in print advertising revenue, steadily declining circulation and the migration of readers to free news online. But more newspapers are developing models for paid online subscriptions or apps for tablets or phones.”