MediaNews bankruptcy: a golden age for news startups?

Analysis of Camera and Post parent company's Chapter 11

| Jan 16, 2010

I can’t say I’m surprised that Denver-based MediaNews Group (well, technically its holding company, Affiliated Media Inc.) has said that it will file for bankruptcy protection. The Wall Street Journal has a report on the latest newspaper-industry dour development, pointing out that the Hearst Corp. has $400 million in equity and debt tied to MediaNews, “and the investment will be wiped out by the bankruptcy filing, according to people familiar with the matter.”

MediaNews is likely to survive, but not without some unfortunate consequences for its newspapers. From the WSJ article:

“(MediaNews Group CEO Dean) Singleton also said cleaning up the company’s debt load allows him to help lead newspaper-industry consolidation, which some people in the industry say would help publishers stay afloat by creating stronger, more efficiently run groups of papers. Others are less sanguine about the benefits of consolidation.

“People in the industry have pointed to MediaNews’ paper in St. Paul and the Star Tribune in Minneapolis as potential candidates for a combination, as well as to adjacent papers in Southern California published by MediaNews, Tribune Co. and Freedom Communications Inc.”

In other words, yet another newspaper-company bankruptcy means that more muscle will be cut from newsrooms (the fat’s already gone) and communities will be more poorly served in the consolidation that’s necessary for industry survival.

daily-camera-bldgWe’ve seen plenty of awful things happen to newsrooms, and now we’re seeing things like copy editors being considered for elimination to save money. (E.g., Star Tribune.)

The newsroom cuts keep coming, and as newspaper companies emerge from bankruptcy owned largely by the banks that held their debt, a return to strong staffing levels and higher quality is unlikely anytime soon. (And why would advertisers return to that?)

So, it looks to me like now is a great time to be in journalism!

I’ve said that a few times recently when speaking to groups of college journalism students, and while I’ve gotten some nods of agreement, I’ve seen more heads shaking and puzzled expressions. But here’s what I mean:

Newspapers across the land are declining in quality, and lacking in coverage of their communities. A retired university journalism department head just today wrote this to me in a private e-mail about his local paper, owned by one of the largest newspaper companies in the U.S.:

“Today’s [newspaper name redacted] is a bulletin board of one-paragraph meeting and event announcements, with canned features from other [corporate parent redacted] papers, local columns by city and county functionaries, booster pieces by c-of-c officials, religious claptrap by evangelists, columns on how and why to clean up your garage, pet care, etc. People who want to announce weddings and funerals are charged by the column inch, and the practice of depth reporting is a distant memory.”

I don’t see a way out of this for local and regional newspapers owned by large media companies. Do you? So newspapers will likely continue to decline, while simultaneously, new digital news entities (for- and non-profit) will continue to increase in quality. After all, the newcomers don’t have massive debt to worry about or expensive presses to maintain; digital publishing is cheap in comparison.

And, of course, many of the new news entities emerging are run by the talented journalists laid off by the once-great newspaper companies. So new news providers’ quality will continue to improve.

The problem for all the new-comers to the (reinvented) news game is the lack of a clear business model to support quality journalism in sufficient quantity. But I’m more confident that they can figure that out than I am in the newspaper industry figuring out the digital business model while also handling the collapse of their legacy business.

“New” news media rises as the old falls. MediaNews Group’s troubles are only the latest to open up more opportunities for the new news eco-system to develop.

It’s an exciting time to be a journalist, if you can stomach the chaotic environment. It’s a lousy time to own an established news media business if you’re still in love with its outdated business model.


steve-outing(Steve Outing is a nationally prominent Boulder-based journalist, consultant and entrepreneur. His musings on digital media, Web 2.0 and news in the Internet era can be read on his blog,, where this article also appeared.)