Veteran journalist and executive Alan D. Mutter's Reflections of a Newsosaur blog has become a popular destination for media members and observers hoping to get a better handle on the troubles being experienced by the industry. He's been a thoughtful and credible chronicler of the business as a whole, with a lively point of view that's reflected in his latest post, "Default-O-Matic Update: Closer to the Brink" (available at the link above). Mutter uses the graphic seen here to track the financial condition of eleven major publishers, six of which have already gone into default -- and he lists MediaNews Group, the Denver-based owner of the Denver Post, as teetering on the brink. Here's the key section:
The publishers most likely to be unable to satisfy the terms of their debt are MediaNews Group and Morris Publishing, according to the latest ratings from Moody's Investors Services, a company hired by borrowers to gauge their likely ability to repay their debt.
The debt of MediaNews and Morris each is rated Caa3, which reflects a 72.9% chance that the company will not be able to fulfill its debt obligations. Morris already has retained bankruptcy lawyers but officers of privately held MediaNews steadfastly have asserted that the company is in better financial shape than its ratings would suggest.
This last sentence reflects one of the challenges in accurately assessing what kind of shape MediaNews Group is really in. Because it's a private company, the firm doesn't have to share the breadth of financial information publicly traded enterprises are required to make available -- and as noted in the January blog "Dean Singleton's Giant Balls," MediaNews CEO Singleton is a master at dismissing dire predictions, knowing that it's virtually impossible for him to be proved wrong unless or until his entire house of cards collapses.
Still, the Default-O-Matic isn't a good place to be, even if MediaNews is currently on the positive side of the default line.
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