Copley once had a pristine balance sheet, because Helen Copley and her selected board members had an aversion to debt. The younger management was contemptuous of this prudence and finally persuaded her to take on debt to buy Ohio and Illinois papers beginning in the mid-1990s. It sold those papers to GateHouse last year, but the ailing chain did not assume Copley debt. Copley claimed it sold the papers because of tax obligations from the death of Helen Copley, although many insiders doubt that explanation. The question is whether Copley paid off its debt after it sold the papers to GateHouse. The company did not respond to a query.
In a speech on June 2, Singleton said that 19 of the 50 largest U.S. newspapers are losing money, and the number will grow. Some experts predict that a couple of dailies will fail within two years; some will cut out certain of their editions, such as Mondays and Tuesdays. The companies have to shell out money to service debt while revenues decline but must spend money to be competitive online. To slash expenses, there have been massive industrywide layoffs. Employees who had nothing to do with the dubious decision-making are left holding the bag, and their heads are inside that bag.