Singleton in Danger of Default?

June 18 2008, 7:23 AM
Business may be improving for pro cycling, but it sure isn't getting any better for newspapers. Bloomberg reports that Dean Singleton's MediaNews, which owns the Denver Post, is among a group of newspaper operations in danger of defaulting on its credit obligations.
...Denver-based MediaNews, the second-largest closely held U.S. newspaper company by circulation, had its credit rating slashed four levels by S&P to B-, or six levels above default. Debt rated B is likely to become impaired in adverse business, financial or economic conditions, S&P notes. Singleton expects the company, with average weekday circulation of 2.6 million in fiscal 2007, to remain in compliance with debt covenants, the chief executive officer said in a June 12 telephone interview. On June 30, if MediaNews has the debt-to-cash flow ratio of 6.53 times it reported on Dec. 31, 2007, it would be in violation of its loans, according to S&P.
Singleton's response to these latest woes is apparently to continue with the strategies that got him into this mess in the first place.
MediaNews is sharing editorial content with other publications to save money, Singleton said. It has also cut pages and lowered the weight of its newsprint. ``We plan ahead,'' Singleton said. ``We've been doing that for 25 years. That's not going to change just because we're going through an economic downturn.''