Potential East Valley Tribune sale is expanded
The East Valley Tribune is reporting that its long-discussed sale to Thirteenth Floor Street Media has been delayed because the company is negotiating to get the EVT’s sister papers in the Valley as well:
The new letter of intent also includes assets of the Sun City Daily News-Sun, Ahwatukee Foothills News and Arizona Interactive in Chandler, which publishes the Clipper advertising shopper and does commercial printing. The Daily-News Sun also publishes the Glendale/Peoria Today and Surprise Today newspapers.
The deal expanded because the operations are so closely intertwined, Freedom said in a statement.
Thirteenth Street owner Randy Miller was expected to be in the Valley this week visiting the staff at Freedom locations.
More details on the new developments at Heat City.
7:00 AM
The bright side of the decade from hell
Chris Coppola, the editor of the East Valley tribune, tries to limn it in a commentary today. He acknowledges the wars and economic troubles that have marked the past ten years, but makes this case:
[…] I’m not convinced the ’00s were all bad for us locally. The progress made in developing our freeway system and introducing light rail in the East Valley, along with ongoing improvements at Gateway and Falcon Field airports in Mesa, and Chandler’s municipal airport, will pay major dividends for this region down the road. History has proven that an efficient transportation system is a major key for any area’s economic health.
We’ve also seen an explosion of new hospitals and medical facilities and expansion of higher educational facilities — all the types of things that add to quality of life and prove attractive to new industries looking to set up shop with varied, and well-paying, jobs.
He goes through each town in his subscription area and notes the steps each has taken to position itself for the future.
My only complaint: In such a Republican area, in reviewing the crises of the decade he could have noted the failures of that party, both philosophically (in how, for example, its distaste for regulation helped create the housing and financial mess) and politically (an utterly failed president, a dismaying 2008 presidential candidate).
Don’t get me wrong: If anything, PHXated despises Democrats even more than Republicans. And I’m rooting for both Coppola and the paper. But it doesn’t help anyone not to utter some simple truths.
The future of the EVT, incidentally, remains in doubt, Heat City reports:
Earlier this month, a spokesman for the Mesa newspaper’s parent, Freedom Communications, said Dec. 24 would likely be the day the company would tell a federal bankruptcy court about the deal it hopes to strike with a Colorado businessman wanting to buy the Tribune.
But late Thursday, after nothing had been filed with the court, company spokeswoman Maya Pogoda said attorneys “have not finalized the agreement” with hopeful buyer Randy Miller.
7:00 AM
The Maricopa County craziness rachets up a notch
The reporter wanted to come film the raid. (?!) The judge, Barbara Mundell, went code red. She went to the Arizona Court of Appeals to block her offices’ being raided. But at the hearing, an assistant county attorney said no warrants were being issued.
Heat City’s Nick Martin cites this as an example of hair-trigger tensions in the court system, as Arpaio and his Dimmer Twin, County Attorney Andrew Thomas, have used just about any aspect of their police and legal powers to harass and intimidate enemies.
The journalist in question is identified only as a TV reporter, and no gender was cited. Unanswered is where the reporter got the tip. According to Martin, the ADA at the hearing said no warrants had been “sought or obtained.” That could mean a) the reporter was lied to; b) the reporter was given a good tip but somehow got the judge in question wrong (a possibility, since he or she seemed to have a screw loose in any case*); or c) Thomas’s office was choosing its words carefully in front of the judge to obscure the fact that some sort of action was about to be taken against Mundell.
Martin says the judge has reason to find herself on Arpaio’s enemies list:
In May, Mundell told a Phoenix TV station she thought Maricopa County’s judges were facing serious intimidation by the sheriff, including possible investigations and retaliation. She said the sheriff was upset, in part, because a judge had just criticized his office for bringing inmates late to their court appearances.
Mundell also fought the sheriff’s office as far back as 2007 over whether his deputies should have access to thousands of emails she and other court officials had sent or received that year. Mundell and Superior Court Administrator Marcus Reinkensmeyer denied the request, and the sheriff’s office eventually sued.
- By which I mean it’s inappropriate for a reporter to find out a raid is about to happen and then call up the target of it to ask permission to film.
7:00 AM
A buyer for the EVT?
A buyer for the East Valley Tribune, slated to close at the end of the year, has been found, publisher Julie Moreno told employees today.
The paper’s owner, Freedom Communications, is in bankruptcy and said two weeks ago that it would shut the paper down at the end of the year after a suitable buyer could not be found.
EVT story here.
The only discomfiting thing about the news is that … we don’t know who the new owner might be:
The buyer was not identified.
Moreno said the buyer has indicated they plan to keep a “substantial” number of Tribune employees.
In a conference call with Tribune employees Friday from Freedom headquarters in Irvine, Calif., Moreno said she has not had any conversations with the buyer about how the business will operate in the future, “but it’s my understanding the intention is to continue to operate the newspaper and Web site.”
More on the sale at Heat City.
If the buyer ever officially materializes and the deal actually goes through, this is great news for the paper’s employees, who were facing a grim new year.
Whether the paper can financially support itself after the deal is the hard part. Freedom’s in the trouble it’s in because it over-leveraged itself buying up new properties, and found itself with its financial pants down after the economic downturn.
Let me underline this point, because it’s not often mentioned in stories about the state of the newspaper industry: Up until very recently, most newspapers made a lot of money. Even in an economic collapse the papers should have been able to get by. (I guess we have to take the word of Freedom that the EVT has been unprofitable for the last two years, but I’d also like to see the sort of money it was throwing off up until 2007.)
But variations of expansion and acquisitions have burdened them with excessive debt, and that’s what’s killing a lot of them.
Now, Freedom is a special case. Some of the family ownership was smart and unloaded about half their interest about five years ago, in a deal that saw a couple of private-equity groups take a 40 percent share.
A WSJ story on the issue said this deal entailed a “relatively small” amount of debt. But here’s an example of how the numbers are working: That same story said the company’s revenues were down fully 75 percent—but it still was earning $50 million. (Note that it was making some $200 million a year until recently.)
Now, that’s not an enormous figure for such a large company (which owns dozens of small papers and eight TV stations).
But when their corporate ownership is leveraged up to its keister, two things happen. One, the papers’ profits are devoted to paying off the companies’ debt. (Which is to say, the profits are going to pay the bill for the privilege of being owned by the financial manipulators who put the deal together.)
That mean the profits aren’t going into making the property better; when the owners themselves aren’t getting their money first, they have even less impetus to sink money into the papers—and that gives subscribers less reason to stay with them.
And two, the leverage gives the papers no breathing room. The advantage of being held by a private company is that in theory you can weather troubled times and think long term without pressure from stockholders to maximize short-term profits. That’s not happening any more.
Here, it seems Freedom’s owners will be wiped out; they’ve supposedly already written off close to $500 million.
The big question about the new owner is: How much debt will it be carrying?
The answer to that question will tell us whether we’ll be reading the same stories a year from now.
12:00 AM
Freedom Communications: Bankruptcy ... and executive bonuses
Over at Heat City, Nick Martin has a list of execs at Freedom Communications who got bonuses, even as the company headed toward bankruptcy.
Freedom holds about 30 newspapers and eight TV stations across the country, including the East Valley Tribune, which announced last week it would close at the end of the year. The bankruptcy is a reorganization plan; the company as a whole isn’t going out of business. It was just a way to help it deal with nearly a billion dollars in debt it ill-advisedly built up.
As PHXated has noted before, before you cry tears for the newspaper industry, remember that it brought most of its problems on itself.
… Which makes the bonuses all the more appalling. Top execs were apparently getting more than $100,000 each—just for helping to run the company into the ground.
Heat City is here. The list of bonuses is here.
12:00 AM
Nick Martin's "Beta Journalism"
Martin is one of the better reporters in town; you can see his grim piece on the third serial shooter in the most recent issue of Phoenix Magazine.
He was an EVT staffer let go in one of the recent rounds of layoffs, but his blog, Heat City, lets him follow a few of his reportorial hobbyhorses.
His latest posting is a proposal for a variant on some of the new thinking of how traditional journalism can take advantage of some of the power of the web.
The trouble to this point has been that traditional journalism has had a hard time letting go of the control it’s used to having in reporting and telling stories. Martin’s proposal:
This could be done by creating a new web application to make it all possible. Here’s how the app would work:
- A journalist writes a story and posts it online in “beta” form.
- The public can then log in to suggest extra sources, point out typos, critique for bias and upload media.
- The journalist or editor makes or approves changes, verifies facts and posts a final draft sometime later (maybe hours or days). The names of the people who helped in the process are included at the bottom of the story as named contributors, giving them ownership of the piece.
Beta Journalism (working title) would be that open-source application. The idea relies heavily on the concept of crowdsourcing. It embraces the knowledge of the community. It tells readers: This is a work in progress – please help us improve it.
You can read his complete idea here.
6:00 AM