Parent company of Saratogian, Record files for bankruptcy. Again.

troy record front page 2012-09-05The Journal Register Co. -- the parent company of the Saratogian and the Troy Record -- announced today that it's filing for bankruptcy. That prompted a WTF? moment for a lot of media people because JRC has already been through bankruptcy recently, emerging in 2009.

So, what's the deal?

John Paton -- the CEO of Digital First (the umbrella company that manages JRC -- yep, an umbrella company for a parent company) and "newspapers' digital apostle" -- posted today that bankruptcy "will have no impact on the day-to-day operation" and urged employees to keep doing what they're doing. He also explained some of the strategy for heading back to Chapter 11. The short story: the company is still being held back by "legacy obligations" -- so the private equity group that owns it is basically washing the company through bankruptcy so it can be sold, freed from many of those obligations, to a related entity.

Update: Romenesko has posted an email from JRC reporter with an understandably critical take on the situation.

Update: Poynter has gotten a hold of an FAQ memo sent out to JRC employees. Among the "unsustainable" legacy costs: defined benefit pensions. (Thanks, Bob)

Update September 6: The New York Post reports a failed deal involving the Philadelphia Inquirer may have also played a role in the bankruptcy. [via @beacongal]

Over at Nieman Lab, Josh Benton has a good explainer/speculation about the future for the situation. A clip:

Digital revenues are growing, but from an unspectacular base. Many of the company's initiatives seem, while interesting, unlikely to move the revenue needle much. Print revenues are a problem, just as they are at its peers. Today's release illustrates that JRC hasn't yet found the magic formula.
But could Paton's plan be a model for the local and regional newspaper industry as a whole, as some have dearly hoped?
Paton now will have his chance to prove it. In around 90 days, he'll have had his chance to shed the costs he wants to shed. No longer will "we were built for print" be a good excuse; if two bankruptcies can't clear out all those cobwebs, I'm not sure what could. "Digital first" will move from a slogan to a corporate name to a foundation of the company's business structure.

The underlying problem here -- as it is for most traditional media organizations -- is that the revenue generated from digital is nowhere to close what they'd been raking in from print/TV/old-school format. It's like trading dollars for dimes. And on top of that, there's new competition, not only from web-only upstarts -- one called Saratoga Wire is launching to take on the Saratogian -- but also from Google and Facebook and everything else online.

This is an extraordinarily interesting time for media. Unfortunately, it's the holy-crap-will-I-have-a-job-tomorrow/will-this-paper-exist-next-year kind of interesting.

Earlier:
+ The Syracuse Post-Standard cutting back publishing to three days a week
+ Post-Star is starting a paywall

image: Troy Record

Comments

Apparently, the underfunded employee defined-benefit pension plan is one of the "legacy obligations" that bankruptcy will affect. If so, then it's not only "holy-crap-will-I-have-a-job-tomorrow/will-this-paper-exist-next-year," but also "holy-crap-will-I-ever-be-able-to-retire," at least for the long-term employees.

What a way to treat your best asset.

If that JRC reporter didn't have a clue that JRC has financial problems, he's been doing a great job of burying his head in the sand -- JRC has been circling the drain for years. And it's not even that "print is dead," or whatever -- it's that they've been milking the print product dry for years, skimping on content (and paying their newsroom staff peanuts, which is hardly the way to retain talent) in favor of advertising, which only works until the advertisers realize that circulation is plunging, 'cause nobody wants to buy the paper if the content is lacking. While print media isn't the most booming business out there, plenty of papers are still making a fairly good go of it -- with the glaring exception of ones run by JRC.

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