I’m chewing through hundreds of pages of new Star Tribune bankruptcy docs this morning. Here are a few key details from management-affiliated filings.
(Remember, these statements back up their request to abrogate a Teamsters pressmen contract; creditors and labor have not had a chance to rebut. Management seeks a March 11 hearing on the matter.)
♦ From 2007 to 2008, Strib advertising sales fell 20 percent, from $244 million to $194 million. The paper’s 2009 projections are redacted, but the paper’s own account indicates the decline is accelerating.
♦ Circulation revenue fell a bit less — 14 percent, from $54.7 million to $47 million in the same period. Lost subscribers and discounts take their toll.
♦ As for debt, $381 million in first-lien notes — held by creditors most likely to get paid — now trade at 17-23 percent of their original value. That means the debt is worth as little as $65 million, and no more than $87 million.
Any local want to make an offer? You can become a creditor cheap, but the sellers might warn you that without big labor cuts, you’ll have to fund expected operating losses.
Another $96 million in secondary notes “may well be worthless,” says one filing. There’s little doubt of that.
♦ There’s not much unredacted about operating profits. However, the Strib account notes that without concessions, the paper might make a skinny $2 million on $203 million in revenues this year. That isn’t enough to service any debt.
♦ As a cudgel to get union concessions, the first-lien creditors have given the paper until April 13 to use cash it has hoarded for bankruptcy. So far, those creditors have agreed to let the Strib fund continuing operations, but after the deadline, “there is no reason to believe that the lenders will consent to the continuing depletion of the Company’s cash.”
♦ The company wants bigger labor concessions than the $20 million it asked for just two months ago. For example, the company wants $3.5 million in savings from the pressmen, 20 percent more than sought in December.
♦ If readers think their Strib has gotten thin, they don’t know the half of it. In 2008, the paper used 46 percent less newsprint than it did in 2004. But the company complains it has only been able to rid itself of 28 percent of the pressmen.
♦ Because not bargaining in good faith is legal requirement to get contracts blown up, management complains the pressmen refused to meet for nearly a month, the latest in a series of “familiar stalling tactics.”
The filing adds, “By contrast, the Company’s other unions who have received proposals have promptly responded, and lengthy negotiations were timely commenced (in one case starting the day after the proposal was delivered).”
♦ As another justification for cuts, one filing complains that the Strib’s pressmen, at $33.90 an hour, make 23 percent more than Minnesota’s $27.52/hour rate. (Note that’s statewide, not metro.) Meanwhile paperhandlers, at $30.25, make more than double the state’s $14.71.
♦ In the good news department, the filing brags the Strib and startribune.com receives 37 percent of all Twin Cities “traditional media” ad spending. Which tells you how tough it is for every other media organization in town.