Tribune falters

The Tribune Company went bankrupt before my former employer, GateHouse Media. Who knew? But it can't be long now...
The great part about the Trib company is that the $8.2 billion deal to take it private was financed in large part through a loan against the employee's pension plans. Of course, the employees had no say in this and now the equity that their pension leveraged in the company is worthless. Of course, that douchebag Zell will get a shot at recouping the $500 million he put in, while the employees won't. Ah, capitalism...

Buh-bye, GateHouse

A former co-worker just emailed to inform me that my old employer, GateHouse Media, is now worth 7 cents a share. Seven...cents...
Thanks to its nauseating plunge to the bottom of the deep end, GateHouse stock was de-listed from the NYSE today. It's market capitalization is now about $4 million dollars. Um, yeah. That means the Register Star could sell its $27 million press for scrap metal and come up with enough dough to buy all 100 newspapers in the chain.
This is what happens when a fledgling corporation builds an acquisitive business plan dependent on leveraging easy credit -- and then the entire global lending system collapses. It shows just how negatively Wall Street views newspapers that no investor has swooped in to snatch up the company; GateHouse's collective paper clip supply is worth more than $4 million.

Back to my old pursuit...

One narrative that's been overlooked here since the start of law school is the continuing implosion of my former newspaper.
Last Monday, the paper announced another 13 layoffs. These are in addition to the 20 buyouts they did in May. I have a hard time understanding how the financial outlook changed so much in four months that they had to cut payroll again. It's like a bunch of kids are running the newspaper business now. No planning, no vision, just reaction to crises.
I'm so glad I got out. But the sad thing is, nearly everyone I know is trying to get out -- especially people my age who've spent 8-10 years in the business. An excellent political reporter I know left a few years ago to pursue law. The best writer I've ever worked with, who became a city editor, is finishing her teaching certificate so she can change careers. Another talented reporter is considering PR work. My career mentor now works for a university communications department. A former newspaper colleague freelances exclusively after being laid off this summer. Last week I met a 3L here at Iowa who used to work for the Peoria Journal-Star. A law school classmate left the Des Moines Register.
Who will mind the till? Editors can try to put on a brave face, but it's a downward spiral because the revenue side of newspapers isn't going to improve. That means more payroll cuts, more reductions to the news product and fewer and fewer readers as the value of the newspaper diminishes. Oh, and don't put your hopes in the internet. It doesn't make money...

P.S. A single share of GateHouse Media, the owner of the Register Star, is trading today at 64 cents. A newspaper off the rack costs $.75.

Another bump on the way down

GateHouse Media, the corporate parent of my newspaper, just got another ding. The New York Stock Exchange won't let the penny stock trade on the floor any more unless it can stay above $1.10 for an entire day. That's looking unlikely, so it's possible the stock could be delisted.
What a ride it's been -- from a $20 IPO just three years ago to getting thrown out of the NYSE. Sweet.
Note that there are 30 days until I become a law student...

I know that guy!

I'm not a golfer and I never have been interested much in golf. In fact, I still think it's a hoity-toity sport for old, rich white guys. And if I ever become an old, rich white guy, I'm still not learning how to play golf.
But this year I've probably paid more attention to the PGA Tour than ever before. I watched Tiger Woods face-off with Rocco Mediate at the U.S. Open. But now pro Kenny Perry is on a tear, which is awesome because he's the only pro I've ever met.
Last year I tagged along with a sports reporter to the Rockford Pro-Am, the longest-running standalone amateur event in the PGA, because he needed help taking video during the day. Kenny Perry comes nearly every year. But this year was special: I was standing among a crowd at one of the tees when an errant golf ball whistled overhead and struck something soft with a thud. That something was Kenny's chest.
Later on, we interviewed Kenny about it -- he had an icepack strapped on under his shirt. I got his autograph and gave it to a friend of mine who loves golf. But the best part was the injured Perry hit a hole in one that day.

Low-dollar deal

UPDATE: Today (Wednesday), we learned that last month was our newspaper's worst drop in profits in year-over-year comparisons in 10 years. The economy is terrible.

A share of stock with my company is now worth less than a short cafe latte.
Hoo boy. Pretty soon I'll be able to buy the whole corporation company by taking out a title loan on my Ford.

Great plan, guys! Lemme know how it works out

The start-up company that bought my newspaper a year ago is about to implode. GateHouse Media was formed four years ago when two bottom-feeding newspaper chains -- Liberty Group Publishing and Community Newspapers -- met in a dive bar five minutes before closing time. They were too drunk to see straight and went home together. Because they both specialized in raping small community newspapers, it was a perfect match.
The new company's CEO, Michael Reed, was lauded as a savior to the flagging newspaper industry. The fledgling company created a "hyperlocal" strategy: delivering content in small markets where newspapers still own the advertising dollar. Using cheap borrowed money, GateMouth gobbled up small dailies, including Gannett's Rockford Register Star, which became one of the largest papers in the new chain.
The company IPO'd at $18 a share in 2006 and a New York hedge fund, Fortress Investment, held a majority of the stock, which paid dividends -- a sweet gimmick attract shareholders.
Then the magic faded. Ad revenue tanked. Thanks to the mortgage meltdown, free-lending banks got kinda stingy with their dough. A year ago, GateMouth was trading near $20 a share. This week, its share price fell below THREE DOLLARS. That's an 86 percent free-fall in value.
If its stock chart were a ski hill, you'd break land speed records going down the slope. And then you'd crash and die...
Last quarter earnings showed a 4.2 percent slide in same-store revenue. Operating margins were barely wide enough to slip a credit card through. That's bad news when you're $1.3 billion in debt and promising your shareholders a dividend payout every quarter.
So long story short, analysts are now predicting the dividends will evaporate so the company can pay its own bills (including $24 million in debt service payments). And with them the last few shareholders will vaporize too since they were only hanging on to the penny stocks for their dividend anyway.
Did I mention that this media company shaved payrolls at nearly every paper it bought in the last year? We lost six people in my newsroom through buyouts. Now we've got one editor for every two reporters.
So one of three things is going to happen: GateMouth is going to start sloughing off its newspapers to stay afloat or file for Chapter 11 protection and slough off its newspapers to appease creditors.
Man I'm glad I'm getting out of this @!#$*& business.

Do not taunt Happy Fun ball

My colleague Melissa used to work in a bureau, a remote outpost deep in the bush of Boone County. Now she works in my office. Yesterday, she had this interchange with a reporter who's still out there in the bureau about an iPod alarm clock thingy that she left there. Jerry is another employee who works out there...

From: K
Sent: Thursday, May 22, 2008 11:35 AM
To: M
Subject: your clock

Hey, your alarm clock/radio goes off every day at 3:30 p.m. and we don't know how to stop it.

From: M
Sent: Thursday, May 22, 2008 11:36 AM
To: K
Subject: RE: your clock

ok, that's super-weird. just unplug it maybe??

From: K
Sent: Thursday, May 22, 2008 11:36 AM
To: M
Subject: RE: your clock

We did. But it kept going anyway. Then, Wednesday, it killed Jerry. Now the walls won't stop bleeding.

Perks

Today I'm working from home because I don't have child care. So I'm sitting at a picnic table at a park watching Nicholas play and writing stories on my laptop.
I should work from home more often.

Quit yer whining

I know I bellyached about working last Saturday, but it turned out to be great. I got to cover a speech by Sister Souljah. Here's my article about it.
For those of you who forgot, Sister Souljah (as in, Soldier) was the little-known community activist who recorded a few tracks with Public Enemy in the early '90s. But her big time exposure came in 1992 when she answered a question from a Washington Post reporter about what was motivating the Los Angeles rioters:

I mean, if black people kill black people every day, why not have a week and kill white people? You understand what I'm saying? In other words, white people, this government, and that mayor were well aware of the fact that black people were dying every day in Los Angeles under gang violence. So if you're a gang member and you would normally be killing somebody, why not kill a white person? Do you think that somebody thinks that white people are better, or above and beyond dying, when they would kill their own kind? (emphasis mine)

That italicized chestnut earned Souljah the rebuke of then Arkansas Gov. Bill Clinton, who used the comment in his presidential campaign as a way to distance himself from black extremism and reassure Southern whites that he could stand up to black folks. Calling out Souljah for her racism was a little like being against terrorism or lukewarm coffee. I mean, who isn't? Now, using that kind of political grandstanding to engender solidarity with a certain voter base is known as a "Sister Souljah moment."
Anyway, back to the speech. It was enlightening to hear her speak because while it's easy to dismiss her as an extremist, her perspective resonated with most of the black audience that night. There's so much lingering resentment among black people that Souljah's not so far out of the mainstream. It's also unfair to judge her on one or two soundbites because most of her talk seemed like a sermon imploring her black audience to stand up, stop imbibing corrosive hip-hop misogyny and hedonism and take control of their destiny.

For the last time

I have to go to work now. On a Saturday. I hate this part of my job.
But... this will be the last time I will ever have to work for a newspaper on the weekend.
Yes.