Blog

By: Michael de Yoanna

Category: Business, Panorama

Posted: September 2, 2009 12:02 PM

Tags: Trends, MEDIA

What's Ah

Life has been tough at the Colorado Springs Gazette lately. In July, the newspaper was put in the embarrassing position of telling its readers that an intern had plagiarized portions of her stories. Now, the company that owns the Gazette, California-based Freedom Communications, has filed for bankruptcy protection in order to restructure debt. "This is too fresh and too real to comment," says Thomas W. Bassett, chairman and a great-grandson of the founder. "We knew it was coming, but it's really a shock." While Freedom---which owns 33 daily and 70 weekly newspapers among other print publications, as well as eight television stations---promises readers and viewers that their services won't be interrupted. The future of the company, however, seems anything but clear. As the Gazette reports, the founding Hoiles family will surrender control of the company to banks, and lenders will select a new board and chief executive officer. Banks don't tend to hold on to media properties long, often selling their ownership, according to one expert. But Freedom isn't alone. As The New York Times points out, bankruptcy is becoming more common for media companies, "many of which are struggling with depressed advertising revenue and sometimes heavy debt loads." Freedom's lenders, including JPMorgan Chase & Company, SunTrust Banks Incorporated, and Union Bank of California hold roughly $770 million in debt, according to The Wall Street Journal.

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