“It’s the debt, stupid,” says Poynter Institute business commentator Rick Edmonds, who chides newspaper chains that grew through debt-financed acquisitions, such as McClatchy, Media News and the new Sam Zell empire. They will have a hard time in this downturn as they try to pay huge interest charges with declining cash flows. He contrasts these expansionists to:
some companies (that) have had the good sense or good fortune not to buy any newspapers this decade. That hasn’t earned them favor on Wall Street, but it does leave a lot more maneuvering room for transformation in the next several years . . . That group would include, among others, A.H. Belo, E.W. Scripps, the Washington Post and New York Times companies, and Cox.
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Speaking of Sam Zell and his new Tribune media company, Tribune chief innovation officer Lee Abrams has some good ideas in his “15 points that’ll grow newspapers.” But he also delivered them in a rather breathless and some golly gee whiz manner which is lampooned by former newspaper columnist turned blogger Nancy Nall Derringer.
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Despite the debt burden on McClatchy, the chain continues to win praise for its Washington and foreign affairs reporting. Robert Niles, former editor of Online Journalism Review, gives McClatchy its kudos in an interview published just before he wrote a goodbye column saying the publication is closed. Good luck — to us all!