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After Months of Struggle, Philadelphia Inquirer Is Latest Paper to Crumble

February 23, 2009 04:30 PM
by Rachel Balik
Blaming a decline in revenue and the economic crisis, the publisher of the Philadelphia Inquirer and the Philadelphia Daily News has filed for bankruptcy.

Philadelphia Newspapers LLC Files For Bankruptcy

The publisher of the Philadelphia Inquirer and the Philadelphia Daily News has filed for Chapter 11 bankruptcy in the Eastern District of Pennsylvania. Reuters reports that Philadelphia Newspapers LLC, which publishes several other local papers in the Philadelphia area, seeks $25 million from bankruptcy courts so that it can pay its staff while it works on restructuring. The company stated that during past 11 months of negotiating with its lenders, it has racked up an additional $13.4 million dollars in interest fees.

By filing for bankruptcy, the owners hope to reduce debt and interest fees, the Philadelphia Inquirer reported. Whether they would retain ownership after restructuring is not yet clear.

Philadelphia Newspapers LLC made its announcement just one day after the Journal Register Company also filed for bankruptcy, citing $692 million worth of debt, a number that exceeds its assets by about $100 million. The publisher owns 20 daily newspapers that serve the Northeast, including the New Haven (Conn.) Register. According to the Associated Press, the company's Web site states it hopes to emerge from bankruptcy as "more financially viable."

Background: Other publications also struggling

Newspapers across the United States are facing flagging sales and advertising due to the prevalence of free online content and a faltering economy. Many publications have suffered so badly that they have been forced to restructure their finances, file for bankruptcy or fold altogether.

In December, Tribune Co., one of the nation’s largest newspaper publishers (controlling the Los Angeles Times, Chicago Tribune, Baltimore Sun, Orlando Sentinel, Hartford Courant, the Morning Call of Allentown, Pa. and Daily Press of Hampton Roads, Va.) sought bankruptcy protection, due to a $13 billion debt and a loss of advertisers.

The Minneapolis-St. Paul Star Tribune officially filed for bankruptcy protection in mid-January after talks with major unions did not yield a series of labor concessions the paper said would be necessary to sustain it economically. The Star Tribune plans to continue publishing news as it restructures its finances, however.

The Seattle Post-Intelligencer recently went up for sale. The only other paper in the city, the Seattle Times, may also shut down; if both publications were to close, Seattle would be the only major U.S. city without its own newspaper.

On Feb. 15, The Baltimore Examiner ceased all publication due to poor ad sales. The free paper served as a counterpoint to the Baltimore Sun, which is typically a more liberal paper. The Examiner has been trying to cut costs since last year by reducing copies printed and limiting home delivery to two days a week. It has also been seeking a buyer for many months, but to no avail.

Related Topic: Failed magazines

Things are so bad for print media that Adverstising Age has published a Guide to Magazines That Have Ceased Publication. The list includes the publications that closed down in 2008 and some that are scheduled to shut down in early 2009. Most of the magazines were targeted at specific groups, such as teens, Latinos, gamers, children or women.

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