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Fitch Ratings, which provides ratings on various investments, said this week that several cities could be without daily print newspapers by 2010. Fitch rates the bonds of both McClatchy and Tribune as junk. Fitch expects newspaper defaults and closures in 2009. The rating agency is negative on media in general, but most downbeat on newspapers. Today (Dec. 4), E.W. Scripps put the Rocky Mountain News and its 50 percent stake in the Denver Newspaper Agency up for sale. The owner of the other half of the agency is MediaNews, owned by William Dean Singleton, who has been rumored to be a candidate to buy the Union-Tribune, although he, too, is very deeply in debt. Scripps says that its half of the Denver Newspaper Agency cash flow is no longer enough to support the Rocky Mountain News -- a blow for Singleton and his Post. Landmark Communications yesterday pulled the Norfolk Virginia-Pilot off the market. Cox is still trying to sell papers including the one in Austin, Texas. Stock of GateHouse Media, which bought Copley Press's Midwest papers in 2007, wound up today at 8 cents today. It was around $17 at the time of the transaction. The money for that deal was forwarded by Fortress Investment Group, which then controlled more than half of GateHouse. Fortress has fallen on hard times. After it suspended redemptions in a hedge fund, its stock fell to $1.89. Stock of heavily-indebted Lee Enterprises, which owns the North County Times, closed at 60 cents today. Copley Press put the U-T up for sale in July.

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Comments

Visduh Dec. 5, 2008 @ 9:08 a.m.

I don't disagree with the predictions. But it is surreal to see these big-city daily newspapers on the ropes just a few years after they were real money machines. For years, I kept wondering just how long that people who did not really read the newspaper would continue to pay for it. There was also the matter of response to ads that retailers kept placing in the paper. Was a broad section of the public really responding to ads they didn't see or read? (Answer is obvious, and the decline of ad revenue reflects it.)

The first ones to go will probably be the smaller circulation paper in a two paper city, like Denver. (That already happened in LA, when the Herald-Examiner folded a few years ago.) Then those in markets where a nearby, bigger city still has a paper. San Diego, with the U-T "replaced" by the LA Times?

Looks like David should have bailed out five years ago--or better yet, he and his mother should have sold the Copley Press a decade back. Too late now.

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Don Bauder Dec. 5, 2008 @ 10:28 a.m.

Response to post #1: Helen Copley was offered a billion dollars for the Union and Tribune back in the 1980s. Larry Lawrence supposedly made the offer. You are right: the two-newspaper towns will be hit first. Denver may be one, Seattle another. There have already been many consolidations, such as in San Diego. Many people buy the paper for the ads, rather than the editorial content. That's especially true of the U-T, which has very weak editorial content. Getting coupons has always been a big motivation -- less so now. Online advertising is so selective: the advertiser can pinpoint his market, and also have instant feedback on how effective the ad is. Newspapers and magazines face a tough future. Best, Don Bauder

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JohnnyVegas Dec. 6, 2008 @ 11:44 a.m.

The LA Times has gone downhill, just slightly, but still downbhill since Sam Zell took it over a few months back.

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Don Bauder Dec. 6, 2008 @ 1:49 p.m.

Response to post #4: And the Wall Street Journal has gone downhill -- although not rapidly -- since Murdoch took it over. Newspaper owners will take profits over quality journalism every time. 'Twas ever thus, and more so in these days. Best, Don Bauder

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JohnnyVegas Dec. 7, 2008 @ 5:21 p.m.

Sam Zell totally F'ed up the LA Times and the shoe has dropped, (can the UT be far behind ????);

Tribune is preparing for bankruptcy filing From Reuters

Tribune is preparing for bankruptcy filing From Reuters

Publisher and broadcaster Tribune Co. is preparing for a possible bankruptcy-protection filing as soon as this week, The Wall Street Journal reported on its website today, citing people familiar with the matter.

The paper said Tribune has been on wobbly footing since last December, when real-estate mogul Sam Zell led a debt-backed deal to take the company private.

http://www.latimes.com/business/la-fi-tribune8-2008dec08,0,4487420.story

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Don Bauder Dec. 7, 2008 @ 9:37 p.m.

Response to post #5: Yes, it has been widely reported that Tribune has hired a law firm that specializes in bankruptcy. It is also reported that there might be some kind of combination of Zell's LA Times, Freedom Communications's Orange County Register and MediaNews's Southern California papers, including the L.A. Daily News. This rumor has been around before and reported here. The latest rumor does not include the Union-Tribune. David Copley wants to get rid of the paper. Such an arrangement might not permit that, although it's possible a sale of assets could be worked out. Best, Don Bauder

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