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The Journal Register Co. - publisher of 27 newspapers - carries $640 million in debt, and has struck a deal with several banks to delay interest payments until the end of October.
The company recently paid down its debt from $730.2 million through the sale of some New England newspapers, according to MediaPost. Lenders generally suggest that a company’s debt should never exceed eight to 10 times a company’s free cash flow in a year. In 2007, Journal Register’s debt was about 11.7 times its free cash flow.
The announcement is another sign of how desperate things in the newspaper industry are becoming. The value of 11 newspaper groups that have traded publicly since 2005 plummeted a combined $23.7 billion in the first half of this year. The value, in fact, fell nearly as much in six months as it had in the three previous years put together.
Tribune Co. holds debt of $12.8 billion since going private with Sam Zell, and speculation has it that it, like the Journal Register Co., may default. Tribune Co. is required by its bond covenant to maintain a cash flow to debt ratio of 1-to-9, which means it must generate cash flow of about $1.1 billion in 2008. Cash flow in the first quarter of the year fell 16 percent to $200 million.
In June, the new owners of the Philadelphia Inquirer and Philadelphia Daily News missed a scheduled payment on part of its $500 million debt taken on in its highly leveraged buyout in 2006.
And A.H. Belo just reported a 21 percent drop in ad revenue in Q2 2008, with total revenues slipping by 15 percent. The company plans to cut its workforce by 14 percent in a bid to trim about $50 million in costs. Other newspaper publishers, including Tribune Co., are hacking away at their workforces, as well.
Though off-air online and experiential advertising grew modestly as a part of the overall radio revenue pie, and election-related political ads increased in Q3, total radio ad revenues were down 9% to $4.97 billion for Q3 and down 10% for…
Only 28% of the audience of an average news program, website or magazine gets valuable information about products and services advertised there, making news venues less effective at conveying ad messages than all forms of media combined (see chart), according…
Target is one of the first brands to create an iPhone application. The Target “gift globe” allows iPhone users to shake their phones to launch a snow-fall effect.
When the snow clears, a gift idea from Target is revealed. Users…
Publicis has acquired full-service agency W&K Communications, continuing its Asia expansion that began several years ago.
W&K will be pulled under the umbrella of Publicis’s Burnett agency network, and will be renamed Leo Burnett Beijing Advertising, writes Adweek.
Other recent Publicis…
Conde Nast is removing Flip.com as an applicationon Facebook come Dec. 16. The website will also be shut down.
Flip launched in 2007 as an online scrapbooking site, reaching 300,000 users. But it failed to sustain the growth Conde Nast…
Effective immediately, any telemarketing call that delivers a prerecorded message must include a quick and easy way to opt-out of receiving future calls. The opt-out must work both for consumers who answer these calls in person and for those whose…
