July 12, 2020

Another Newspaper Company to File Bankruptcy

MediaNews Group Inc. will be the latest in the string of troubled newspaper companies that have had to seek protection from creditors amid unsustainable debt loads. The holding company plans to file for bankruptcy protection by the end of the month.

MediaNews, which owns 54 daily newspapers, along with television and radio broadcasters, is expected to file bankruptcy in Delaware as early as this week. MediaNews has been nearing bankruptcy for months but had been trying to rework its debt load outside of bankruptcy court, said William Dean Singleton, the company’s chairman and chief executive.

MediaNews will file a prepackaged bankruptcy, in which companies gather support from creditors ahead of a filing, creating a streamlined bankruptcy that can be approved by a judge quickly with little or no opposition from creditors. Sources familiar with the transaction said the company has been valued at approximately $200 million, including about $50 million of equity value.

Singleton, who has been able to retain control over MediaNews, represents a victory as bankruptcies often result in board and management changes. According to Singleton, cleaning up the company’s debt allows him to help lead newspaper consolidation, which some say could help publishers stay in business by creating stronger, more efficiently run groups of papers.
Singleton wants to be aggressive in merging newspapers. Potential candidates for such a merge have been pointed out, including MediaNews’s paper in St. Paul with the Star Tribune in Minneapolis, and adjacent papers in Southern California published by MediaNews, MediaNews Group Co., and MediaNews Group Inc. When asked what groups of newspapers may merge, Singleton simply said “you can look at the map.”

Because only MediaNews’s holding company is filing for bankruptcy protection, its newspapers should remain unaffected. The company remains current on vendor payments and should remain so, said Singleton. Also, the company’s trade creditors, suppliers and employees should be unaffected by the filing.