Star Tribune faces bleak financial future
The last twelve months witnessed unprecedented turmoil at the Star Tribune. Apparently 2008 won't be any better for the state's largest daily newspaper. MinnPost's David Brauer has posted Strib publisher Chris Harte's grim memo detailing the company's economic prospects that went out to employees earlier today.
Despite the newspaper exec's half-hearted attempts at glass-half-full rhetoric ("I don't mean to be gloomy, because I'm basically an optimist ..."), the facts are relentlessly bleak. Strib revenues have dropped by $75 million over the last two years despite repeated personnel cuts. Not surprisingly classified advertising has led the bleeding, with a staggering 50-percent reduction since the start of the decade. What's more, operating cash flow--the money left over after expenses--has also dropped by half over just the last two years. While Harte notes that newspapers across the country are facing similar difficulties, he acknowledges that the Strib's economic performance has been "well below the median for our industry."
What does this mean going forward? The Strib has hired Restructuring Associates out of Washington, D.C. to help solve the problems. This grimly named company specializes in bringing management and unions together to come up with creative financial solutions. Given that the newspaper has already shitcanned the old ladies who answer the phones and the mentally retarded, outsourced ad design to India, and cut back on office garbage removal to a degree that has led to rat sightings, the road forward can't be pretty. Apparently finally kicking Par Ridder to the curb didn't portend an end to the daily newspaper's misery.