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Can the Star Tribune survive?

In 1992, when the Star Tribune celebrated its 125th anniversary of publishing a newspaper in Minneapolis, employees were given a grand coffee-table book.

It showed front pages reporting the impeachment of President Andrew Johnson in 1868 through the San Francisco earthquake in 1906 to that glorious day in 1991 when the Minnesota Twins won baseball’s World Series.

Sadly, a future edition of the book might include Friday’s front page featuring the headline “Star Tribune files for Chapter 11.”

Bankruptcy will not frame the final story on the newspaper that has delivered history’s first draft to generations of Minnesotans, Chris Harte, the current publisher vowed on Friday.

“We are proud of the tradition of journalistic excellence that the Star Tribune has established over more than 140 years, and we plan to continue building on this cherished legacy far into the future,” Harte said in a full-page letter to readers.

Experts agree the Star Tribune has a shot at surviving bankruptcy. 

“I suspect that they will try to do business for quite a while,” said Gregory Duhl, who teaches bankruptcy law at William Mitchell College of Law in St. Paul. “A lot of companies emerge from Chapter 11.”

Readers as spectators
Readers who follow the process closely, though, will find themselves mere spectators. And not with box seats. The case was filed in Manhattan. What happens there will have nothing to do with the newspaper’s role in our Midwestern civic life and our shared history.

That’s a disturbing disconnect for me — and, I’m guessing, for a good many Twin Citians. I can tell you first hand that people in this community felt like they owned the newspaper. I was a reporter there for 26 years. Not a week went by without some reader assuming the role of my boss — taking me to task when I stumbled or sending me an atta-girl note when I did well.

I loved the praise and the criticism alike because readers were telling me that they were engaged with my stories and the newspaper. Profitable as they are, I’m guessing that Walmart and McDonald’s never achieve any relationship with their customers as close to the love-hate bonds that connect the Star Tribune to the community.

It’s our newspaper, generations of Twin Citians have thought. But, of course, it isn’t in a strictly business sense. Currently, it belongs to Avista Capital Partners, a New York based private equity group. When this bankruptcy is over, what’s left may belong to the creditors.

All about the creditors
The court room drama that will play out the Star Tribune’s fate is all about those creditors, not those of us who are loyal readers and stern critics. Journalism and the community’s interest in keeping a strong local newspaper have no roles in this play.

“They are not even on the list of the issues that will come up,” said Edward Adams, a University of Minnesota law professor who specializes in bankruptcy.

“What this is about is how to pay the creditors,” he said. “Their interests are the driving force.”

After a flurry of housekeeping work — ensuring that money is available to pay the light bills, employees, ink suppliers, etc. — a key step in the give and take of bankruptcy will be to negotiate a plan for restructuring in a way that could make the newspaper a sound business that is capable of paying its debts. The Star Tribune will propose its plan. The secured lenders will respond. The various sets of plans will come together eventually. Or not.

“The creditors may suggest an alternative plan or they may say that this business is no longer feasible, and it’s better to liquidate it,” Adams said.

“If they make a compelling case that these guys don’t get it, that this business is never going to work … the court could, in theory, say the Star Tribune hasn’t found a plan that is feasible, and we are going to go to a liquidation,” he said.

The problem that drove the Star Tribune to this sorry point is the debt the current owners assumed when they bought the newspaper in 2007 for $530 million. The Avista-led buyers borrowed all but $100 million.

The elephant in the courtroom
But the proverbial elephant in the court room also will be the fact that the business model of newspapers is collapsing nationwide.

“That’s a big issue in this case,” Adams said.

As the bankruptcy judge weighs arguments over the potential viability of the Star Tribune, the sad reality is that newspapers all around the country are fighting for their lives because advertising is not only moving online but also severing its longstanding ties to news content.

No one knows at this point whether any newspaper has a chance to win the fight, said Tom Rosenstiel, director of Pew Research Center’s Project for Excellence in Journalism.

The stakes for our nation’s civic life are immense. In the Upper Midwest, no other news organization has a journalistic staff as large as the Star Tribune’s. That remains true even though Avista has slashed the newsroom staff by 25 percent since it bought the newspaper in 2007.

Of course, we have lively or thoughtful radio and regular television news. But even those newsrooms often rely on the Star Tribune’s reporters and photographers to stir up the stories as they poke around government offices and hold politicians accountable.   

“In any community the news organization with by far the largest number of boots on the ground is the newspaper,” Rosenstiel said. “Local television news which has the largest audience has just a handful of reporters. The numbers of stories that are on a local newscast are a fraction of the number of stories covered in a local newspaper.”

News radio? “Local news radio is almost a vanished breed,” he said. And public radio is substantially national with some local augmentation.

“But it’s nothing that would be comparable in scale to what you get from a local newspaper,” he said. “Most of what people know about their community comes from the newspapers.”

I know from conversations around town that many people believe newspapers are losing their audience. Further, they trust that some other form of journalism will replace the printed news report.

They are wrong on both counts.

Rosenstiel is one of the nation’s top experts on the state of news organizations. So I asked him to explain why.

First, the audience for many newspapers actually is growing if you combine their web sites and print editions, he said. And most newspapers are making a profit this year, although it’s down sharply. Their problem is that print editions generate most of the revenue, and that part of the business is shrinking as advertising moves elsewhere. Advertising in online news sites is not picking up the slack. 

Second, there is no alternative on the horizon right now that could replace journalism as we’ve known it and pay reporters to gather news.

If this were a matter of the audience moving to another news source and that source was financially viable, then this would be simply a transition from — say, newspapers to television. But that’s not the case. This is a shift of the news audience from platforms that were commercially viable — radio, newspapers and television — to a platform that is not commercially viable.

Experiments with non-profit alternatives like MinnPost can supplement coverage in specific areas like investigative reporting, public affairs or the arts. But so far they are not “replacements for a big city metro with a full complement of reporters that are covering the waterfront,” he said.

“The crisis in journalism is not from reporters shifting from one medium to another,” he said. “It’s reporters disappearing period.”

In other words, the urgent question for news junkies in Minnesota and around the nation is, not so much whether we will have our news printed on paper or online. It is whether we have any substantial news gathering organizations at all.

“Are newspapers, as they move to the Internet, entering a tunnel in which the darkness represents the transition from the print economic model to some unknown Internet model?” he asked hypothetically. “Or are they entering a cave in which there is no exit, no sunlight on the other end?”

No one knows the answer at this point.

But so far, newspaper owners have not shown anywhere near the level of innovation that gave rise to online profits at Google and other successful Internet companies.

“I don’t see the news industry being very creative,” he said. “I see small experiments. But I also see an enormous amount of defeatism and an enormous amount of conventionalism. I see the newspaper industry basically trying to work within [shrinking] advertising and manage costs.”

No obituary
This article is by no means an obituary on the Star Tribune. I’m a newspaper addict. And I love my local paper. So I’m rooting for the Star Tribune to win this fight and just maybe help its industry punch through the darkness of this transition to the Internet.

On the first floor of the Star Tribune’s building at 425 Portland there is a gallery of historic stories the newspaper has delivered to our doorsteps over 14 decades. Framed copies of front pages line a hallway, reporting natural disasters, wars and many of life’s victories too.

Never once in 26 years did I walk that hall without getting a little catch in my throat over the historic sweep of journalism as we’ve known it in this community and this nation.

As a reporter, I’m supposed to be a tough-minded realist. But I still wrestle with the reality that this bankruptcy is merely a business matter — no different from the liquidation of Circuit City or the reorganization of Northwest Airlines.

Sharon Schmickle reports on foreign affairs, science and other topics. She can be reached at sschmickle [at] minnpost [dot] com.

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Comments (14)

  1. Submitted by Eric Ferguson on 01/19/2009 - 02:06 pm.

    Sharon, you didn’t mention that though operating profits are down, the Star Tribune is profitable aside from debt service. Rather than comparing the Star Tribune to Northwest Airlines or Circuit City, you would do better to compare it to the Tribune Company and Chrysler. They too were purchased by a speculator or private equity company that bought them almost entirely with debt, and then left the purchased company to pay the debt. When they couldn’t, the owners weren’t responsible for the debt. Instead, the taxpayers are bailing them out, or the creditors are left hanging, employees lose their stock and their jobs, communities lose employers and newspapers, but the owners don’t have to pony up anything themselves. You can bet however that if they purchased companies made a profit, the private equity companies could keep it. This should be illegal, but apparently isn’t.

  2. Submitted by Keith Nordeen on 01/19/2009 - 09:30 pm.

    Thank you for your piece on historical significance and impact the Star Tribune has in our community. I love reading the newspaper. I would be very sadden to see the paper fail. In our busy lifestyle we are getting news content from sources other than the daily paper. This unfiltered content from talking heads, bloggers, tweeters et.al cause me great concern that this delivery of news is less than stellar. When you were at the Star Tribune your stories were edited by men and women who made sure stories met all the journalistic standards before the story was published. Facts were checked. Spelling, grammar, objectivity were mandates. I love Minnpost too because of the writers who used to work at the Star Tribune. I sense the disciplined writing you all learned at the paper. Keep up the good work.

  3. Submitted by Sharon Schmickle on 01/20/2009 - 09:40 am.

    Eric, you make great points about the debt load adding to the burdens on the Star Tribune and the Tribune Co. newspapers. Still, the underlying reality is that the business model for newspapers is collapsing. What the debts do is cut short the time these particular papers have to ride out the recession in the short term and search in the long term for viable alternatives.

  4. Submitted by Henk Tobias on 01/23/2009 - 08:54 pm.

    Personally I’ve been in mourning for the lost of the paper that taught me to read 47 years ago for quite a while now. While I do most of my reading on the net I do miss having a newspaper to read, especially Sunday, but the Strib left me behind several years ago when they took a hard right turn. Save your protestations, its true. The strib took to heart the cries of “Red Star” emanating from the wing-nuts over at KSTP AM. In trying to appease them with the hiring of the likes of Doug Tice, Katherine Kersten and running opinions of neo-con cheerleaders like Krauthammer and Will, they lost the trust of faithful readers like me. The ironic part of all this is that the wing-nuts don’t buy newspapers. People like me do.

    For years, it started with Nixon in my opinion, the wing-nuts have been crying foul, screaming from the tops of their lungs: “librul media!” They did studies to prove it. My God, reporters were voting Democrat! Its a librul conspiracy. The decline in readership and the right wing assault on the “media” coincided. The “media” response was to move to the right. They never seemed to notice the right didn’t trust them and would never subscribe. Another thing they failed to see is that conservative ideology is base on false assumptions and out-right lies. Here’s a list from just this last week: Obama’s inauguration cost 147 million while Bush’s cost 42; they leave out security costs for Bush and add it to Obama, thus the 100 million difference; Obama isn’t president because Roberts flubbed the oath; There are 81 terrorist from GITMO on the battle field killing Americans, this one is great, the Pentagon made this announcement, but qualified it by saying only 18 were confirmed and really can’t confirm that confirmation, but wing nuts don’t care.

    Yes yes, I know, declining add sales, the rise of the internet and all, but the bottom line is, the move to the right has killed the credibility of the news business and the Star and Tribune. I simply do not trust the stories I read or the judgment of the editors. Its very sad as I said, I learned to read at the age of 4 by reading the Sunday comics in the Minneapolis Tribune. We got the Star in the evenings, but on Sunday got the Tribune, I loved it, and read it my entire life, had it shipped when I lived in other parts of the country. But that is gone, I’ve moved on.
    I do agree that we need the newspapers, most of what I read on line is other newspapers, but this move to the right is killing them just as much as anything else.

  5. Submitted by Richard Parker on 01/23/2009 - 11:33 pm.

    Well put, Henk Tobias. It’s refreshing to read the views of someone who isn’t trashing the “Red Star,” and you make much more sense. I fear we’re preaching to the choir here, though…

  6. Submitted by elizabeth farnsworth on 01/24/2009 - 01:46 am.

    First, I love the startribune. I have been reading it since 1970.

    What we are seeing is a disintegration of mass media in general. Not just newspapers. The recent bloodletting at Clear Channel radio, and local television stations are proof of that.

    People are now getting their ‘news’ from websites that already share their viewpoints. No one will be introduced to alternative points of views. The internet is just a big gossip machine with no checks or balances.

    I am deeply concerned with where this will lead us as a society.

  7. Submitted by Karen Schell on 01/24/2009 - 06:36 am.

    The “old” Tribune and Star died many, many years back. It became increasingly politically correct and extremist hard left. People just are not interested in reading, much less paying for, a cross between “People” and “The Socialist Worker”.

    Good newspapers will survive while the chaff is taken by the wind. Had the StarTribune realized some time back that there are not enough people on the political left fringe to keep it afloat and attempted to offer some balance, things may have turned out quite different. Instead, as it is, we are seeing it going off gently (or otherwise) into that good night. That is sad. But even sadder is how it managed to put itself in that inevitable – but avoidable – position.

  8. Submitted by Tim Kolehmainen on 01/24/2009 - 08:15 am.

    I find it disturbing that seven entries into the comment session, there is already one person who claims the Strib is “hard right” and another who claims it to be “extremist hard left.” The irony of it is that neither is true…newspapers are (opinion pages aside) generally fair and balanced and present opposing viewpoints. But when presenting those viewpoints in opposition to what some believe, they begin to read that viewpoint into everything presented in the paper. People, please try to think for yourselves and not be told what to think.

  9. Submitted by Karen Schell on 01/24/2009 - 08:40 am.

    Tim Kolehmainen says:
    “The irony of it is that neither is true…newspapers are (opinion pages aside) generally fair and balanced and present opposing viewpoints.”

    Incorrect, Tom. As several people had already alluded to the StarTrib’s far-left bent. e.g. the allusion to “the Red Star”. It’s the worst kept secret in the world. Ask anyone what the political stance of the Strib is and the answer will be almost uniform.

    Liberal slanted media in general is dying, “Air America” provides a sterling example of this. The market for leftwing media just is not that big to support a plethora of outlets. Besides, every media market has it’s saturation point. If the market for conservative radio had reached it’s peak it would be dying as the liberal media, ala the StarTrib, is now.

    If the StarTrib were not geared toward the political left, you would see people across the political spectrum upset and mourning it’s impending collapse. But as you can see, only the left is feeling a great sense of loss. From others you get – at most – a shrug and a “yeah, that’s too bad”.

    As I mentioned above, others mourned it’s passing some 30-40 years back. It was a grand paper back in the day. There was a time when the Tribune and the Star reported the news instead of re-inventing it. I feel for the folks who will be out of work – had the Strib been attuned to the diversity of views in the area it served, things may well have been different.

  10. Submitted by John Reinan on 01/24/2009 - 10:01 am.

    I challenge Karen Schell to offer three examples of left-slanted news stories in the Star Tribune. Not opinion columns, not editorials: news stories.

    Karen, I bet you can’t do it. And if you can’t, your whole argument collapses.

  11. Submitted by Karen Schell on 01/24/2009 - 11:33 am.

    “John Reinan says: I challenge Karen Schell”

    Sorry, John, but you’ll have to do your own homework. I assume you are aware of how to use Google? If so you can serach it employing terms such as “left”, “slanted”, “Minneapolis Star Tribune”.

    The comments section isn’t for personal debate or attempts to prove one’s testorine level , but discussion of a given posted article. Ms. Schmickle has written an excellent article here. In addition to her helpful analysis, she offers an informative and human angle – her personal experience with, and her thoughts of, the Strib. We know how these things influenced her article. Would that the Strib itself had taken that cue from her in it’s own reporting. Ideally, all media outlets should inform the public of their bias (note: bias doesn’t always = bad) in any given story. i.e where is the reporter, network, paper, etc “coming from” politically?

    As I said, your own education is entirely up to you – if you have a questioning, learning attitude and are not just venting anger here.

    Although others here – presumably liberals themselves – have already highlighted the fact of the Strib’s reputation (“Red Star” isn’t all that subtle), there’s no dearth of information regarding that reputation. If you are not experienced with using Google, you may go to newsbusters.org and use the “search” function there to seek reportage on “Star Tribune”. If you weren’t aware of how the Strib earned the notorious “Red Star” nick you certainly will be educated on that point. Good luck as you research.

  12. Submitted by John Reinan on 01/25/2009 - 08:58 am.

    I rest my case.

  13. Submitted by Karen Schell on 01/25/2009 - 06:45 pm.

    “John Reinan says: I rest my case.”

    Ah, I thought you were seriously looking to find information and be educated, John. My mistake.

    But if you feel you may become undone in viewing (much less. addressing) the myriad of instances of documented Strib liberal bias at just newsbusters.org alone, then it is probably for the best – “nervewise” – that you do indeed avoid such an upsetting experience. However as you get older, I believe you will find willful ignorance based on such fears does not serve a person well.

  14. Submitted by John Reinan on 01/25/2009 - 09:22 pm.

    No, Karen, I asked you to find three examples of leftward bias in news stories. You hemmed and hawed and said you weren’t here to do my research for me.

    But you completely dodged the question. Point me to three examples — that you found on your own, not some regurgitated info from a right-wing website.

    And explain where the bias is in each one.

    If you can’t or won’t do that, then I’m done debating you, and I win.

    Go ahead, find three examples and explain where the bias is in each. If you can do that, I’ll electronically shake your hand.

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