Star Tribune files for bankruptcy
The Minneapolis Star Tribune filed for Chapter 11 bankruptcy protection late Thursday, January 15. The paper is attempting to restructure its debt and lower labor costs.
The daily, purchased for $530 million by Avista Capital Partners just two years ago, has missed several debt payments over the last 12 months. A Publisher's Statement filed with ABC Sept. 28, 2008 showed average paid circulation for the Star Tribune was 322,357 on weekdays and 520,829 on Sunday. For the same period in 2007, weekday circulation was 336,697, and Sunday circulation hit 570,024. Readers' median age is 50, according to a 2008 report by Scarborough Research.
“With the significant deterioration in our revenue in 2008 and the challenging outlook for our industry for 2009, we simply could not wait any longer to take this step,” publisher Chris Harte said in a statement. “Our plan is to use the court-supervised process to reduce our costs, strengthen our balance sheet and create a financially viable business.”
Delivery, subscription services and advertising should not be affected by the bankruptcy filing, though the paper's labor contracts could suffer.
In an open letter to readers, Harte insisted, “The Chapter 11 filing will allow us to continue business as usual as we take further steps to strengthen our company. Readers and advertisers should see no difference in how we operate.”
So far, there is no set timeline for the restructuring process. The paper listed assets of $493.2 million and liabilities of $661.1 million in its filing.