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.
Guardian to become digital-first publication
Guardian News & Media is the latest news organization to announce it will reorganize its strategy to focus on its digital initiatives.
“By becoming a digital-first organisation we’re taking the next natural step, one which we believe all newspapers will eventually have to take,” said Alan Rusbridger, editor-in-chief of London-based GNM, in a press release. He also informed employees that GNM would “move beyond the newspaper, shifting focus, effort and investment towards digital, because that is our future.”
Print will remain key to GNM operations, but “the strategy would involve changes to its newspapers over time and investment in digital initiatives such as a new US operation based in New York and new mobile offerings,” the release added.
Andrew Miller, chief executive of parent company Guardian Media Group, said, “The opportunities presented by the growth of digital media are immense. The Guardian’s journalism has never been more widely read. However, the same forces driving opportunity in digital are creating challenges for newspaper publishers across the developed world, including GNM.”
In May 2011, its site guardian.co.uk garnered more than 50 million monthly unique browsers and 2.8 million daily unique browsers globally. The national newspaper grew its paper readership by 3 percent against declines in the UK print press market of between 8 and 15 percent.
Other publications proclaiming their operations to be digital-first include The Journal Register Co. in the US and Postmedia in Canada.
Photo courtesy of mac steve