Jan 16, 2010

Avoiding the "B" word

The news of MediaNews Group's pending bankruptcy hit with a whimper inside many of the group's own newspapers. Most of the MediaNews stories I scanned yesterday used vague headlines, eschewed analysis or expert opinion of any kind, and downplayed the word "bankruptcy." They also relied on a single source for their information, a press release from MediaNews chairman Dean Singleton, to describe the deal.

The Denver Post, for example, ran the headline "Pact lets Post owner cut debt." The story didn't mention bankruptcy until the third paragraph. The Salt Lake Tribune dug deep into the word jar to keep "bankruptcy" out of the headline: "Tribune owner's holding company agrees to 'prepackaged' financial restructuring." That headline screams, "Don't read me!"

The San Jose Mercury News also played the story small, as the San Francisco Peninsula Press Club observed:
The Mercury News ran the news that its parent company was about to enter Chapter 11 bankruptcy proceedings on the bottom of the business page today. The headline, "Mercury News parent swaps debt for equity," was the smallest headline for a news story on the page, and it didn't mention the word bankruptcy. The first two paragraphs don't use the B word either. One line before the jump, the word "bankruptcy" can be found. In a letter to employees, CEO Dean Singleton said the "financial restructuring is a non event for readers and advertisers."
The Los Angeles Daily News, which ran a story written by the Torrance Daily Breeze, also used the "...parent swaps debt for equity" headline construction.

In the short term, the bankruptcy probably won't be noticed by readers, advertisers or newsrooms - and not just because of how the story was played. However, any time a business convinces lenders to take a $765 million hit the lenders will demand something in return. Now that the lenders own a stake in the newspaper chain, what kind of profit margins will they demand? Do they want to see MediaNews grow? Are they happy to be in the newspaper business? Or would they rather see the chain broken up and sold off? Time - and I hope some of these very same newspapers - will tell.


Anonymous said...

Well considered. A debt for equity swap can be associated with exit of original owners. The benefits to debt holders can be arcane - tailored to tax circumstances and balance sheet issues. The MNG Chpt. 11 bankruptcy, as described by the company, is opaque. Difficult to see whether original owners are looking to continue operations under their management as a going concern, or whether this is an apparently highly skillful exit strategy, that maximizes the owners' position under severe circumstances.

Anonymous said...

A non event for readers and advertisers. Let's set aside advertisers. For readers? You mean the "great quality" of journalism you provide won't be going even further downhill?

You can color the coverage by your newspapers the way you want but the fact is you failed.

Anonymous said...

since when has this company ever cared about what's a non-event for readers? compared to 97% of the nonevent pablum forced on MediaNews readers by inept editors, this is Pearl Harbor plus the Presidential Election.

Sad scribe said...

"Pearl Harbor plus the Presidential Election" is the way I'm going to describe all big stories when I pitch them now. Me likey!