Black Press's stalking horse: The auction that will seal the fate of hundreds of newspapers
The future of journalism in dozens of communities will be determined in an auction this month
from Frasier Valley Current, Feb 7, 2024 (excerpt)
…Having realized last summer that its debt load was too heavy to manage, Black Press hired a US company to try to offload some of its properties, according to a report by the monitor of the ongoing creditor protection process.
That company, Dirks, Van Essen & April (DVA), is considered “the leading merger and acquisition firm in the US newspaper industry,” the documents say. Over the last three decades, the company has been involved in the majority of newspaper transactions.
At first, Black Press told DVA to try to find a buyer for its Hawaii newspapers, including its one big US daily—the Honolulu Star-Advertiser.
“It was hoped that the sale of BP Hawaii’s business would generate sufficient cash to allow for a significant payment toward the Companies’ existing creditors,” the documents say.
But although the Hawaii operations were profitable, the potential purchase price was lower than Black Press had hoped. Four days after DVA started shopping the Hawaii papers, the firm was instructed to turn its attention to finding a buyer for the company’s Washington State community papers. And four days after that—having received no better news—Black Press finally told DVA to see what its Canadian papers might fetch.
During the process, 52 potential buyers were contacted. Five made offers “for various combinations'' of Black Press’s three entities. None were good enough to forestall creditor protection.
Financial statements for Black Press’s two main divisions have now been released. They show that the Hawaii papers—including the Honolulu Star Advertiser—made a gross profit of about $24 million each of the last two years. But after amortization of equipment, restructuring costs and indirect expenses are factored in, the papers have operated around the break-even point….
There’s one new lingering (and potentially massive) liability hanging over the company.
According to the Hargreaves’ affidavit, a class action lawsuit has been filed in Hawaii alleging that the company collected subscribers’ personal information then disclosed it to Facebook without the subscribers’ consent. The plaintiffs are claiming at least $2,500 in damages for each of more than 50,000 subscribers with Facebook accounts. Black Press denies the claims.
If the company were ordered to pay $2,500 paid to 50,000 people, it would need $125 million. However, such debts are considered “unsecured” and, like the pension obligations, might not be acquired by Carpenter and company….
read … Black Press's stalking horse: The auction that will seal the fate of hundreds of newspapers
Post Alley: Major Shakeup in Washington State and Hawaii Journalism
ILind: Star-Advertiser and other Black Press papers going to auction