So there I was surfing PA Watercooler, and BAM! this item hits me: Inky & Daily News In Trouble August 5 2008 . I tried to follow they hyperlink to a Bulletin article, but once on the Bulletin's website got lost...so I did a little search and lookee below at all I found: whispers of financial issues and a consolidation of newspaper newsrooms (Daily News and Inquirer)? Wow, are our newspapers on life support? Then I found something about Journal Register too...Journal Register is the parent company of our beloved weeklies.....

Editor and Publisher: Philly Newspapers Face New Debt Troubles
By Joe Strupp
Published: August 06, 2008 12:50 PM ET

NEW YORK The owner of The Philadelphia Inquirer and Philadelphia Daily News is facing more debt troubles, according to a Standard & Poors report that says the company has received a forbearance agreement from creditors through Sept. 10.

The S&P report, issued Aug. 1, states: "Philadelphia Media Holdings has won lender support for a forbearance agreement that runs through Sept. 10 … as previously reported, lenders had been asked to forbear a default stemming from a covenant violation at the end of the fourth quarter."

Philadelphia Magazine reported that the S&P disclosure means that Philadelphia Media Holdings "will face a serious financial penalty — interest on its debt will climb a full percentage point — in exchange for being allowed to skip payments during that period. PMH has also offered to surrender $15 million from its revolving line of credit, reducing it to $35 million."

Philadelphia Media Holdings is the investor group formed by publisher Brian Tierney that acquired the newspapers in 2006. In recent months, the company has had to renegotiate a missed debt payment, while just last week asking unions to consider bypassing scheduled September raises.

Sought for comment, PMH spokesman Jay Devine responded to E&P with an e-mail that stated only: "As a private company, we will not have any comment on the S&P or any other financial report."

phillymag.com: Financial Worries Deepen at Philadelphia Media Holdings

According to a report released today by Standard & Poor’s, the owner of the Philadelphia Inquirer and Daily News has received a forbearance agreement from its creditors that will run through September 10th. Philadelphia Media Holdings, the investor group put together by publisher Brian P. Tierney to acquire the papers and philly.com in 2006, will face a serious financial penalty — interest on its debt will climb a full percentage point — in exchange for being allowed to skip payments during that period. PMH has also offered to surrender $15 million from its revolving line of credit, reducing it to $35 million.

The change in the line of credit is moot, yet speaks volumes. The company is already prohibited from accessing its credit line after violating a term of their loan covenant several months ago. S&P is also reporting that PMH is seeking a $3.2 million letter of credit — a short-term, stopgap funding measure.

Perhaps most tellingly, the market is shying away from a media ship that looks increasingly like the Titanic.

Clog: More financial troubles for Inky/ Daily News/ Philly.com publisher
Tuesday, August 5th, 2008 at 9:00 am
posted by Tom Namako

Sandra Long to lead newspapers' consolidation efforts

Sandra Long, a veteran editor at the Philadelphia Inquirer, is taking on a new job for both the Inquirer and Daily News, in charge of consolidating operations of the newspapers' photographers, copy editors, editorial assistants and photo toners

Media Daily News: Journal Register Risks Default, A.H. Belo Makes Big Cuts
by Erik Sass, Tuesday, Jul 29, 2008 7:30 AM ET

In a sign of how dire things have become for the newspaper business, The Journal Register Co. announced it had struck a deal to delay interest payments to several banks until the end of October. The company also hired a "chief restructuring officer" to help management navigate its financial morass. JR de-listed its stock, trading at four cents a share, from the New York Stock Exchange.

The company, which publishes 27 mostly small newspapers, is carrying $640 million of debt, an intimidating figure next to total revenues of just $463.2 million in 2007. This tally comes after the company paid down the debt from $730.2 million through the sale of a group of newspapers in New England.

In light of this, Standard & Poor's has given the firm its lowest credit rating: "D." As a rule of thumb, lenders often stipulate that debt should never exceed 8 to 10 times a company's free cash flow in a year; Journal Register's debt in 2007 was about 11.7 times its free cash flow of $54.5 million from operating activities.

It may be cold comfort, but Journal Register isn't alone. In June, the owners of The Philadelphia Inquirer and Philadelphia Daily News missed a scheduled payment on part of the roughly $500 million debt incurred in their highly leveraged acquisition of the papers in 2006. Specifically, Standard & Poor's said Philadelphia Media Holdings, the consortium representing the owners, missed a payment on $85 million owed to the Royal Bank of Scotland.

Editor and Publisher: Owner of Philly Papers Blames Leak For Interest Payment Story
By Joe Strupp
Published: June 06, 2008 12:05 PM ET

NEW YORK Owners of the Philadelphia Inquirer and Philadelphia Daily News say someone wrongly leaked information from a private conference call earlier this week that resulted in a Standard & Poor's report on the ownership missing an interest payment.

Jay Devine, a spokesman for Philadelphia Media Holdings, declined to confirm or deny the report that the company missed a June 1 interest payment on $85 million of loans and is in talks with lenders for relief. But he said the report was the result of an improper leak by someone involved in the conference call just days ago.

"The report was the result of someone breaking a confidence of a conference call that was held the other day between the bankers, our company and financial analysts," he told E&P Friday, declining to say what day the call occurred. "We will express our disappointment and try to reiterate the fact that they are confidential discussions and private discussions and ask people to honor that confidence."

Initial reports have stated that Philadelphia Media Holdings "did not maintain the necessary senior debt-to-cash flow ratio -- which can happen when cash flow shrinks -- required by its senior lenders, according to Standard and Poor's Leveraged Commentary and Data unit," AP reported. "As a result, senior lenders blocked the company's interest payments to $85 million in junior loans held by another group of lenders. That's because senior lenders, who hold at least $295 million in loans, want to preserve the company's cash for repayment of its own loans."...Brian Tierney, PMH chief executive, and Mark Frisby, executive vice president, did not return calls seeking comment Friday.

Isn't that Toll guy one of the big investors in Philadelphia Media Holdings (PMH)? It sure seems surprising he would allow this to happen, doesn't it? So PMH doesn't answer to financial reports? Well wonder how the rest of the private investors involved in PMH feel about now? Check out the list from an old PRNEWSWIRE release:

PHILADELPHIA, May 23 /PRNewswire/ -- Philadelphia Media Holdings, LLC,
a private investment group led by advertising executive Brian P. Tierney
and Bruce E. Toll, a co-founder of Toll Brothers Incorporated, today
announced that The McClatchy Company has accepted its bid of $515 million
in cash and $47 million in assumed pension liabilities to acquire The
Philadelphia Inquirer, the Philadelphia Daily News and related media assets
including Philly.com.

Philadelphia Media Holdings was formed in 2006 for the purpose of
acquiring the Inquirer, Daily News and related online assets, and is
comprised of local Philadelphia-area investors.

"This is a day of immense pride and heartfelt excitement. The next
great era of Philadelphia journalism begins today," said Philadelphia Media
Holdings chief executive Brian P. Tierney. "Newspapers represent a civic
trust, and we believe that trust is best held in the hands of local
investors who have a vested community interest in their success. We are
ecstatic about the opportunity to return the ownership of these great
newspapers to a family of civic minded, long-term investors. History is
punctuated with many stories about the success of local and family
ownership in the newspaper industry. We have one goal - growth. We believe
that revenue can be significantly enhanced through even more aggressive
marketing that will boost circulation and advertising both in print and on
the web."

In addition to Mr. Tierney, Chairman of Tierney Holdings, who will
serve as Chief Executive and Mr. Toll who will serve as Chairman,
Philadelphia Media Holdings investors include Leslie A. Brun, Chairman and
CEO of Sarr Group, LLC, a diversified holding company; the Carpenters
Pension & Annuity Fund of Philadelphia & Vicinity; Katherine D. Crothall;
Bill Graham, CEO of The Graham Company, a large regional Philadelphia-based
insurance brokerage firm; Michael Hagan, Chairman and CEO of NutriSystem,
Inc.; and Patricia Harron Imbesi, principal of Patriarch Media LLC.

Oh where's the love and the civic trust if the paper ain't paying the bills? What happens to us if our newspapers go under....OH MY GOD, bloggers might just rule the world? LOL! And if that happens, what's next?