If the NYT can't be made to work, are newspapers viable?

Dateline: Mon 08 Dec 2008

Dire news yesterday and today, as reports come in about severe financial strains and potential bankruptcies at both the Tribune Co. (Chicago, Los Angeles and Baltimore) and the venerable New York Times.

Here is what insider alley says on the Fortune website this morning:

"Tribune was toast the moment Sam Zell loaded it up with $13 billion of debt. That it is now considering bankruptcy, therefore, comes as little surprise. (Read this early prognosis from Alan Mutter if you doubt that sane industry observers saw this coming).

"More startling over the past year has been the collapse of the New York Times (NYT). The New York Times Company has a $400 million debt payment due in five months, and management has not yet explained how it plans to meet this. The company is nearly out of cash, its operations are now burning cash, and its attempts to sell assets have, so far, been unsuccessful."

What is most troubling about the NYT is that it now faces negative net worth.

"Over the next year, it will be required to shell out more than twice as much cash as it has on hand."

A point, not original, but worth pondering: if a prestigious national-circ newspaper like the New York Times cannot make it, are newspapers doomed?

The future seems very bleak indeed.

Thanks to the numerous readers who sent these stories my way.


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