Tuesday, February 24, 2009

More newspaper shake-ups loom with Chapter 11

With the four owners of 33 U.S. daily newspapers seeking bankruptcy protection in the past 2 1/2 months, even more upheaval looms for an industry clearly gasping for survival.

Analysts doubt those newspaper companies will be able to emerge from Chapter 11 bankruptcy protection without agreeing to lenders' demands for radical changes, such as switching some of their newspapers exclusively to online delivery.

Of course, the newspaper publishers already have been mulling dramatic makeovers, including scrapping their print editions, and it's still not clear whether their creditors can come up with any better ideas. But that probably won't discourage exasperated lenders from trying to shake things up.

"These first few bankruptcy filings are like the canaries in the coal mine," said John Penn, a bankruptcy lawyer in Fort Worth, Texas. "It's almost a certainty that they are going to have to change their business models because the old ones aren't working."


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