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Newspapers Turning the Corner?

David Carr has a nice piece in today’s NY Times about the Minneapolis Star Tribune. In short, the paper has recently posted some increases in circulation (partly fueled by a Groupon!) and actually made enough money to distribute profit sharing checks to its employees. A feel good story for Carr – who is from Minnesota – and the publisher Michael Klingensmith, a local kid done good in NYC who came home to run the paper. Extrapolating from this one piece, the gist is that maybe, just maybe, newspapers have a future & that the business is stablizing. There are definitely people out there paying for print papers. There are even more people reading the content online. And there are still challenges (getting revenue from the digital audience) in front of papers. But, after dramatic layoffs and some bankruptcies, maybe papers have ‘right-sized’ (oh, management speak) their way to a tenable position. In the Star Tribune’s case, the equation is this:

…at the start of 2010, $500 million in debt had been reduced to $100 million in the reorganization, costs were way down because of the cuts, and revenues from both advertising and circulation had begun to crawl back.

To my eyes, that $400 million reduction in debt is huge: Wall Street (often via private equity buyouts and other M&As) saddled newspapers with ridiculous debt loads that made their financial positions hopeless. Dialing this debt back dramatically changes the equation – hopefully papers in places like Philly that have also gone through bankruptcies will be as adept as the Star Tribune at capitalizing on their new opportunities…

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