Since coming together in the middle of the last decade, GateHouse Media has been struggling with $1.2 billion in debt that it took on to assemble a chain of more than 300 community newspapers.
In 2008, I wrote in CommonWealth Magazine that company officials claimed they had no problems making debt payments — yet they were in the midst of dramatically downsizing their operations, including at about 100 newspapers in Massachusetts.
A year ago, Jack Sullivan, also in CommonWealth, found GateHouse was warning shareholders that bankruptcy was an option, even as the company was paying out $1.4 million in bonuses to top executives.
Now, it seems, the moment of truth is at hand. According to Emily Glazer and Mark Spector of the Wall Street Journal, GateHouse appears likely to undergo a “prepackaged bankruptcy” with the cooperation of its creditors in the hopes of emerging from the proceedings debt-free. (Non-subscribers may read the Journal story by searching for it on Google News. Don’t worry: Rupert already knows, and he says it’s OK.)
If GateHouse could put itself on sounder financial footing, that would certainly be good news for employees and readers of papers such as the Patriot Ledger of Quincy, the Enterprise of Brockton, the MetroWest Daily News and the myriad weekly papers the company continues to operate.