Talking about the Globe cuts

In a way, I find it odd that newspapers are dying. I realize that the advertising model is fading. That said, it’s hard to watch TV news or listen to radio news or talk shows without constantly hearing, “in today’s globe, I read that…” or, “have you seen the headline on today’s New York Times”?On one hand, papers are dying. On the other hand, the rest of the media still seems to rely on them. Just an observation.

Ani, a lot of those investment vehicles used traditional assets — mortgages, and loans to companies — as their basis. The NYT is $1.2 billion in debt, and suburban newspaper chain Gatehouse is $1.9 billion in debt. This did not happen without access to capital from financiers, many of whom got the money to lend from pension funds. So, lax regulation let financiers take money from our pensions and loan them out to businesses and homeowners who had no viable way of paying them back. The “housing bubble” was also a “business bubble.” The problem at newspapers is not limited to declining print ad revenue; they also have the problem of being in serious jeopardy after taking the bait offered by financiers who could care less whether newspapers survive or not. (Oh: and the biggest pension funds? They tend to be state public employee pension funds. So as a taxpayer, when these investments tank, you’ll still be paying the bill, if you’re a US citizen, to make good on the unfunded pension. Meanwhile, financiers and top execs get golden parachutes and big management fees. They’ll be fine; workers, homeowners, and taxpayers…well…not so much).

Another one bites the dust: Minneapolis Star Tribute files for Chapter 11.Not really dead, though. It’ll “continue business as usual as it restructures.”

Lisa – – – agree wholeheartedly. Some of these newspapers would not be suffering as badly if sellers had not profited with overvaluations in the sale, and buyers had used their own hard earned capital to purchase. This myth of making lots of money with someone else’s pension money is proving it isn’t so good. Historically, many of these newspapers produced a fortune for their owners and if they had stayed as owners they be gong through a few bad years and have to forfeit a tiny amount of the accumualted prior earnings.And, of course you can’t sell newspapers for $1 or more a copy without news any more than you can sell meals in a restaurant without food and a cook.