Media

Strib Bankruptcy Watch: The Hits Keep Coming

Filed under: Media

It's been a tumultuous week at the Star Tribune, what with all the speculation that the paper of record is broke. Here's your roundup of the week that was.

A cheeky take by the Brits, with the genius headline Newspaper Killer Confesses.

At last, we have found a culprit who is slowly killing newspapers across the United States. Her real name is unknown, but her online identity is daphne3620 and she left the following comment on the Web site of the Minneapolis Star-Tribune:

Now I feel like garbage I read the Star Trib online and don’t subscribe to the actual physical paper. Sorry .. guys! I would gladly pay to use the site here .. give it a thought. I am serious .. I will pay.

This comment was attached to an article posted to the Strib’s Web site on May 6 that revealed that the paper’s owner had to write down 75 percent of the $100 million it paid for its stake. Private equity firm Avista Capital Partners engineered a purchase of the paper from McClatchy Co, which was announced in 2006. Since then, the paper has hemorrhaged revenue, just like many other big-city dailies.

The write-down, taken at the end of 2007, reflects the estimated loss of value and is consistent with the falling stock prices of publicly held newspaper companies such as McClatchy and the New York Times. Avista’s public accountants required the private equity firm to write down or “mark to market” the estimated value of the Star Tribune.

The memo denied a recent report in the New York Post that the Star Tribune may file for bankruptcy.

“The Star Tribune currently has sufficient liquidity and is up to date on all its debt payment obligations,” said the memo, distributed by Avista.

And if this turns out to be wrong, daphne3620 and all her freeloading friends will have to pay a very big price indeed. (Me included.)

George White of the Daily Deal writes about a potentially revelatory press conference held by the Star Tribune's new cost cutters, the Blackstone Group:

At a Wednesday media conference, Jill Greenthal, a senior advisor at Blackstone, said that the current environment is "as turbulent a time in media as we've ever seen, particularly for old-line companies. I think we're only at the tip of the iceberg in terms of what it means for the industry."

With the Internet gutting the high-margin classified business that the industry has long relied on, newspapers are hunting for new business models that will allow them to weather the storm. The turmoil has attracted investors like Avista and Sam Zell.

"Buying a newspaper is not for the faint of heart. It's either a really great time to buy a newspaper," Greenthal said, "or a really bad time to buy a newspaper. Time will tell." But from the state of the Star Tribune, it may be the latter. - George White

And another British take, this time suggesting the Strib might be the first major American newspaper to go under:

Will the Strib be the first domino to fall in America's newspaper crisis?

A sign of the increasingly hard times in US newspapers, as portrayed by Philip Stone, is a real eye-opener. In December 2006, one of America's ailing newspaper chains, McClatchy, sold the Minneapolis Star Tribune to a New York private equity group, Avista Capital Partners, for $530m (£271m).

At the time it was widely thought that McClatchy were the losers, having paid $1.2bn (£614m) for the paper nine years earlier. Well, McClatchy is hardly doing well nowadays but Avista's Minneapolis investment has proved to be one of the all-time financial disasters.

Avista, having invested $100m of its own money and borrowed another $430m to fund the deal, has announced that it has written down the value of its investment by 75%. And one report at the weekend claimed that the Star Tribune - known as the Strib - was facing bankruptcy.

That may well be far-fetched because Avista has said that the paper can meet its obligations. But Stone points out that the assurances are hardly convincing. Doubtless, the banks which loaned the money to Avista, Credit Suisse and the Royal Bank Of Scotland, are also going to be wary of touching newspaper investments in future.

So how is the Strib doing in terms of sales? Last week, the paper reported that its weekday circulation had dropped by 6.74%, to 321,984, in the six-month period up to March 31. Almost all US daily papers are losing sale, but that's one of the worst performances.

Posted by Kevin Hoffman at May 10, 2008 10:34 AM | Comments (0)

 

Now where is that pesky convention again?

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Apparently, everyone needs a little geography lesson now and then, even the fact checkers at the USA Today.

The House Committee on Oversight and Government Reform recently surveyed hospitals in seven U.S. cities. “Lawmakers looked into hospitals' ability to deal with a sudden influx of victims in the five cities considered at highest risk for terrorist attack and in the two cities hosting this summer's political conventions…Denver and Minneapolis,” the newspaper reported.

The Committee found that the Hennepin County Medical Center does not have the capacity or space in the emergency room to handle a surge from a terrorist attack.

But, it seems only Congresswoman Betty McCollum (D-“I’m so smart, I’m from St. Paul, the third most literate city in the country!) and the Associated Press noticed a glaring error in the Committee’s work.

They never investigated Regions Hospital in St. Paul, the designated first responder for an incident at the Convention Center.

Editors take note: McCollum corrected her colleagues in Congress last Wednesday, saying something to the likes of this.

The convention is in St. Paul, you morans.

Posted by Beth Walton at May 9, 2008 10:34 AM | Comments (1)

 

What we learned about the Strib's financial misfortunes today UPDATE x4

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We're on Strib Bankruptcy Watch Day 3, and the caffeine is giving me and the story a second wind. Business really picked up yesterday with the publication of Jeff Shaw's web-exclusive news story revealing that the Strib's debt was trading below 60 cents on the dollar. Ouch.

As MinnPost's David Brauer describes it:

After Shaw's story broke, Strib parent Avista Capital Partners finally handed one of their reporters some inside dope; Neal St. Anthony disclosed that Avista was "forced" to write off $75 million of their $100 million investment. St. Anthony amplified Shaw's info, noting that $96 million in subordinated debt trades for 10 cents on the dollar. Citing cost cuts and unspecified revenue-producing investments, an Avista memo states, "We view 2008 as the year to prove a recovery is possible." So far, so bad.

You can read the Strib story about it here. You can read the New York Post's story about it here.

How have readers been taking the news? There's only four comments on the Strib story so far. This one is the most brutal:

They dug their own grave My company spent hundreds of thousands annually on advertising. They literally threw our money out the door with an amazingly arrogant and irrantional attitude. When negotiating a contract that was worth 6 figures, they basically told us to pound sand. We withdrew our advertising completely, and found that our sales actually INCREASED when our dollars were directed to other media. This newspaper is irrelevant to sales. Thus, they are destined for a liquidation. They have only themselves to blame.

posted by wanninger on May. 6, 08 at 11:12 PM |
21 of 25 people liked this comment.

Keep in mind, we also learned that the Strib has been censoring negative comments on its website.

UPDATE 1: David Brauer has the goods on what it might mean to how the paper looks in the near future. The short version: They're trimming some of the extraneous sections and bulking up arts and entertainment coverage.

Call us gloomy guses, but we think it's going to take a lot more painful cuts than this for the Strib to rightsize it's way out of this crisis.

UPDATE 2: Brauer's got a sweet scoop on ramped up efforts to sell the Strib's downtown land. Money quote:

The Strib put it back on the market in January, and now, according to a company memo, the tire-kicking has begun in earnest. Facilities tours began Tuesday, and employees were alerted today that "there will be others over the next few weeks as interested parties come forward."

The memo adds, "We will make every effort to ensure that the tours do not interfere with work operations."

Naw, no way will a roomful of anxious journalists be distracted by strangers measuring the drapes.

To which we can only add: Paging Zygi.

UPDATE 3: Lambert is on point today. Here he tries to figure out the reasoning behind a newspaper company botching the P.R. game so badly:

After a very long year with this crack investment team, we all understand that that "communications thing" really isn't their game. But you would have thought the paper's current publisher, Chris Harte, a.k.a. Avista's "newspaper guy," would have understood that "hiring" heavyweights such as Blackstone might be news, and, therefore, maybe it would probably be a good idea to get ahead of the curve and do the fancy dance, reassuring skeptics that this is simply good, old-fashioned, contingency business stuff, nothing urgent, nothing overly serious. It would, I'm saying, be better than, mmmm, letting someone slide a rumor of bankruptcy to a tabloid that then goes ricocheting around the Internet, making you look like a colossal basket case.

Read the whole thing.

UPDATE 4: Top stories on Google News for "Star Tribune":

Avista Wrote-Down 75% of Investment in 'Star Trib'

Editor & Publisher - 4 hours ago
By E&P Staff NEW YORK Avista Capital Partners, the owner of the Star Tribune in Minneapolis, wrote down 75% of its $100 ...

Star Tribune owner takes write-down
Bizjournals.com, NC - 7 hours ago
Avista Capital Partners, which owns the Minneapolis Star Tribune informed investors that it wrote down a big chunk of its investment in the paper. ...

Star Tribune's owner forced to write off much of its investment
Minneapolis Star Tribune, MN - 19 hours ago
Avista Capital partners wrote down 75 percent of its $100 million share of the purchase price and said the outlook is still uncertain. By NEAL ST. ...

Posted by Kevin Hoffman at May 7, 2008 4:22 PM | Comments (4)

 

Is the Star Tribune censoring criticism on its website?

Filed under: Media

It's been a crazy week at the Strib, what with the announcement in the New York Post on Sunday that Minneapolis's daily paper of record was on the verge of bankruptcy. Although the Strib denied that rumor, it did acknowledge that it had brought in the Blackstone Group to help manage its debt-load.

Now comes word, via the comments section, that the Strib may be extending its P.R. campaign into censoring reader comments on its website.

Several readers allege they left comments on the original article that were deleted because the point of view was negative toward the Star Tribune.

Will the Star Tribune censor... ...these comments, too? In their first story over the weekend eight people left comments. When they weren't going in the Star Tribunes favor they were deleted and no more comments were allowed.

posted by Average_Joe on May. 6, 08 at 6:15 AM |
9 of 11 people liked this comment.

Re: Will the Star Tribune censor...
I was wondering what happened to a short comment I made yesterday. I thought I was losing my mind... Wow. It's like we're in second grade all over again if this is how it's going to be.

posted by DainVeli on May. 6, 08 at 12:13 PM |
0 of 1 people liked this comment.

The comments feature does appear to be off on the article.

Posted by Kevin Hoffman at May 6, 2008 6:16 PM | Comments (4)

 

Katherine Kersten manipulates quote in column on Grand Theft Auto IV

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Letter writer Joshua Nichols points out some selective editing by Strib conservative lightning rod Katherine Kersten in her recent column on Grand Theft Auto IV.

In the column, Kersten writes:

"[T]eenage boys of America," wrote one reviewer, "... you can still kill and maim and plunder and screw until your heart is full," but now "the violence is no longer cartoonish." Thanks to GTA IV's new realism, when G-stringed strippers grind the main character's lap, the player's controller vibrates in response.

But if you run the phrase "can still kill and maim and plunder and screw" through a Google search, you'll find the source material, this Slate column. As you'll see from reading the full quote in context, Kersten used some selective editing to remove portions that were inconvenient to her conservative orthodoxy.

Yes, concerned teenage boys of America, if your parents are irresponsible enough to let you get your hands on this, you can still kill and maim and plunder and screw until your heart is full. But there's a difference this time: The violence is no longer cartoonish. Shoot an innocent bystander, and you see his face contort in agony. He'll clutch at the wound and begin to stagger away, desperately seeking safety. After just scratching the surface of the game—I played for part of a day; it could take 60 hours to complete the whole thing—I felt unnerved. What makes Grand Theft Auto IV so compelling is that, unlike so many video games, it made me reflect on all of the disturbing things I had done.

This isn't the first time Kersten has selectively edited other journalists' work in service to her conservative agenda--she also borrowed liberally from a student newspaper for her recent expose on a sex-positive club at the U of M. Check out this letter from a former editor at the Minnesota Daily:

Dear Ms. Kersten,

Last I checked the Minnesota Daily is a real newspaper organization and If I'm not mistaken Ms. Kersten, you get paid to write articles for the Star Tribune, are a Star Tribune representative, and in turn the Star Tribune profits off advertisement when readers read your column. Your article regarding the U's student group is nearly filled with quotations from the Minnesota Daily article. While you do cite your source and note that no one was available to comment, I find your actions to instead steal another reporter's work and print it under the guise of your work to be the borderline of plagiarism. You are not writing a blog for the internet Ms. Kersten, you are getting paid as a writer. In this instance I find your ethics to be less than desirable and that the Daily has a probable legal challenge against you and the Star Tribune. When the Star Tribune is not able to reach someone for comment, it does not begin aimlessly posting quotes from the New York Times or the Chicago Tribune. I find your actions to plagiarize a lesser newspaper in poor taste and ethically concerning. No link was even provided to the original article plagiarized.

Secondly, your article did not state whether any of those quoted consented to being printed in your article, especially since their words were maliciously modified and coerced. You also included a quote from a University student who is not even directly related to the student group in question, that you did not obtain yourself. This complete disregard of the sources providing you quotes in the first place is a very grave concern. Sources must be treated with the utmost dignity and especially when you did not obtain them or authorize them yourself.

As a former Minnesota Daily editor who has worked tirelessly to truly bring a credible news product to the Twin Cities, your actions are a very arrogant, dismissive and cowardly slap in the face to the hard work of our student reporters who are paid to do real reporting. I would ask you kindly apologize to the reporter in which you have so audaciously stolen from her and print a retraction and apology to the people in question. Unfortunately the Star Tribune has already begun profiting off your stolen work, that cannot be returned to the Daily. The media landscape is not a playground, there are rules to live by and are likely spelled out in your contract Ms. Kersten. There is an ethical standard the press is held to (yes even columnists).

Sincerely and with urgency,

CC: Star Tribune corrections
Star Tribune editor
MN Daily Newsroom
MN Daily Editor
Queer Student Cultural Center
Genevieve Clute
Courtney Sinner

Is there any other journalist in town that gets away with this kind of behavior? (Besides C.J.)

Posted by Kevin Hoffman at May 6, 2008 1:30 PM | Comments (1)

 

NY Post: Blackstone Group to Strib's Rescue?

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The writer at the newspaper who started the Star Tribune bankruptcy rumor has a followup article in today's edition.

Although the update first seems to back off the bankruptcy claim, implying that the Blackstone Group is here to save the day, by the end of the story we're back in Chapter 11.

Most intriguing is this bit of inside gossip at the end:

Sources close to the situation said yesterday that Blackstone's options for restructuring the Strib's balance sheet are limited and include finding a group of investors to inject additional cash into the company in exchange for some of Avista's equity, or having the private-equity firm invest more.

"The company may be able to pay its debts this week, but if they cannot find additional capital, there is no way they can avoid bankruptcy," said a source familiar with the situation.

Posted by Kevin Hoffman at May 6, 2008 9:27 AM | Comments (0)

 

How bad is it for the Strib?: Questions and answers from independent reports

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Reporters examining the Star Tribune's finances can be compared to a group of blind men reporting on an elephant. No one source, not even the paper's higher-ups themselves, seems to have all the answers.

Here, we've isolated some critical outstanding issues that everyone is wondering about. Using industry reports and outside sources, we offer the following informed speculation on where the paper stands now and what's to come.

How bad is it for the Strib financially?

Unclear, but not a disaster so far. Industry reports on the Strib's fiscal health are surprisingly sanguine. Dun & Bradstreet is the leading provider of credit information on businesses and corporations. We acquired their comprehensive reports on both the Star Tribune and its parent company, Avista Capital Partners.

The likelihood that the Strib "will experience financial distress in the next 12 months" or "will not pay [its creditors] on time over the next 12 months" is listed as "low," and is well within the zone considered safe. In 2007, firms with this classification had a failure rate of just 1.2 percent.

This does mean that the Strib's version of events (they've successfully paid debts up until now, and are looking to restructure financial obligations to avoid a future day of reckoning) is more likely to be true than the Post's doom-and-gloom scenario. This does not mean there aren't gathering storm clouds.

The data is not all rosy -- the Strib gets a mixed rating compared to its media company peers -- but it's not ashes and sackcloth, either.

Why is this story coming to light now?

Multiple possibilities. The hiring of private equity firm Blackstone Group to help sort out upcoming financial challenges is certainly newsworthy, so maybe the Occam's Razor explanation -- the press discovered new information and ran with it -- is valid.

But I talked with two financial services experts not connected with the situation yesterday, and each offered a different possible theory about why the New York Post story hit at this time. Either are plausible. Neither is necessarily mutually exclusive from the other.

One, a longtime national business journalist, floated the possibility that Avista themselves leaked the story in advance of trying to sell the Strib. With media companies proving to be a less profitable investment than other capital strategies, it's possible that the firm has decided to sell and is using this story to fuel perception that the paper can be had for a bargain-basement price. Another source, a former CEO, said the timing of the story suggests it's a tool to use in upcoming labor negotiations.

Both of these are speculative opinions, to be sure, but both are possibilities that locals have considered as well. We have calls in to both Blackstone and Avista that have gone unreturned thus far. We will update this post as new information becomes available.

What are the chances this is a scare tactic in the pending labor negotiations with the Guild?

Possible. As MinnPost's David Brauer has noted, the union is skeptical about the story's timing, and I think they have good reason to be. Aside from the obvious -- contract negotiations begin next week, and this is a weighty cudgel for management to swing -- labor costs are among the Strib's most significant expenses.

More on the reasoning behind this in the next answer.

What powers will the Blackwell Group have? How has Blackwell acted in past instances where they were so empowered?

A primary part of Blackstone's strategy has been reducing labor costs, including reducing wages among unionized staff. During its work with Delta during the airline's bankruptcy, union pilots were asked to take a pay cut of 30 percent.

This is a different situation than Delta's, because there is no Chapter 11 filing (at least not yet). A better example might be Blackstone's work with Xerox in 2001.

Rumors of impending bankruptcy started to swirl when the company hired Blackstone. In about a year's time, Xerox came back from the brink -- after shedding 10 percent of the workforce.

Yes, there were other measures taken, like raising capital and "improving operational efficiency." But there's a pattern here of slashed wages and layoffs. For a fascinating background on firms like Blackstone, which are largely unregulated, I recommend the In These Times story "Pirates of Private Equity."

Given the $4.1 billion acquisition of Bristol Myers Squibb on Friday, could Avista be trying to liquidify cash for this deal?

Highly unlikely. Avista has Scrooge McDuck money. Because they aren't a public company, financial data on them is limited, but we were able to run down some hard facts.

The Dun & Bradstreet report on Avista rates their financial health as very high, and their credit risk as extremely low. The report says their financial stress is minimal and the likelihood they'll experience cash flow problems over the next 12 months quite small. Even compared to other wealthy private equity partnerships, their balance sheet is favorable.

Buying Bristol Myers Squibb to them is probably like buying a new car to you and me. A significant investment, but not one likely to require freeing up capital.

Posted by Jeff Shaw at May 6, 2008 6:39 AM | Comments (5)

 

The Strib on Blackstone Group: We mean business, not bankruptcy

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After a day of furious activity and speculation in the wake of Sunday's surprise revelation that the Star Tribune had brought in restructuring expert the Blackstone Group in an attempt to avert bankruptcy, the Strib has finally released a new statement, albeit in the form of an article about itself. The message: "Bringing in Blackstone, Star Tribune means business."

Translation: Even the Strib's own reporters don't seem to know what to make of the revelation. The usually astute Chris Serres is reduced to positing anything from "new loan terms to additional equity investors in the paper." The paper's own spokesman, Ben Taylor, declined to comment, as did the spokesman from the mysterious Blackstone Group.

What isn't in doubt is that the Strib is in serious financial trouble:

But the Star Tribune's decision to hire the Blackstone Group indicates the newspaper is trying to deal with the financial ramifications of this decline head-on, before it becomes a full-blown crisis, said analysts. "They see the iceberg ahead and they hired Blackstone to try to manipulate the rudder and change course before they hit it," said Tom Corbett, an equity analyst who covers the media industry for Morningstar.

And as much as the Strib was whistling through the graveyard at the mention of bankruptcy yesterday, it's hard to escape that specter when you read paragraphs like this:

Considered a heavyweight in the world of large-scale corporate turnarounds, New York-based Blackstone has advised Delta Air Lines, Enron, Global Crossing and other embattled corporations through their Chapter 11 bankruptcy reorganizations. "To bring in a heavy hitter like Blackstone, you know the problems at the Star Tribune must be serious," said Ed Atorino, managing director of the New York investment banking firm Benchmark Capital. "They're in there to do more than just talk to the banks. They're in there for a longer-term outcome."

Posted by Kevin Hoffman at May 5, 2008 10:49 PM | Comments (0)

 

BREAKING: Strib Bankruptcy Article Fallout -- Who is the Blackstone Group? UPDATE x9

Filed under: Media

THE STORY SO FAR: On Sunday, the New York Post claimed the Star Tribune of Minneapolis was on the verge of bankruptcy. Publisher Chris Harte issued a memo denying bankruptcy but acknowledging the hiring of the Blackstone Group for help restructuring finances. Strib staffers were stunned. Now comes news that the Blackstone Group took a hit on the failed Yahoo! deal this weekend. Meanwhile, Strib owners Avista Capital Partners just made a big purchase in the medical sector.

As you'll see below, Avista Capital Partners, the owner of the Strib, agreed on Friday to the $4.1 billion purchase of a piece of Bristol-Myers Squibb. This, combined with the news of Blackstone Group's involvement in the Strib's assets, may signal a shift by Avista out of the media sector (which is tanking) and toward more heathcare holdings, which are already a major part of its portfolio.

Sunday was anything but a day of rest for the Strib. First came a report in the New York Post alleging that the newspaper was on the verge of bankruptcy and Avista Capital Partners stood to lose its entire $100 million investment. Next I contacted Strib Publisher Chris Harte, who promptly issued a statement. While Harte denied the bankruptcy rumors, he acknowledged that the newspaper had indeed hired the Blackstone Group, as had been alleged.

"We recently hired the Blackstone Group to help us evaluate alternatives to our current capital structure, but that hardly merits a conclusion that we are near bankruptcy," Harte said in a statement released shortly after 6 p.m. Sunday evening. "In fact, Blackstone has substantial expertise in balance sheet restructurings through means other than statutory proceedings like bankruptcy."

Although Harte denies it, a knowledgable source tells me that you don't hire Blackstone to restructure your balance sheet when you have sufficient liquidity to continue meeting your obligations. Also, note that Harte's statement reads: "The facts are that the Star Tribune currently has sufficient liquidity and is current on all its debt payment obligations." Emphasis mine.

The Latest:

UPDATE 6: City Pages interview with Duchesne Drew, the Star Tribune's assistant managing editor for local news:

I see you guys are covering the story on the front page of the business section today.

I expect we’ll do more tomorrow about it. It’s no secret [that the Strib is going through tough times financially]. My expectation is that we’re still going to be here six months and six years and hopefully 60 years as well.

What did you think of the NY Post article?
I don’t know what to make of the Post article, cause I don’t know who his sources are. I don’t want to be overly dismissive of it, but I also didn’t read it and think I need a new job.

What was the reaction in the newsroom?

I think most people were surprised by the story in the Post. The mood here is not … nobody’s packing boxes. It’s not news to us that circulation is down, but it’s not plummeting, it’s just down. What’s telling … our circulation fell in the last cycle and we moved up in the rankings. So it’s something our entire industry is going through. It isn’t really news to us in terms of the challenges we’re facing.

What do you know about the allegation of an impending bankruptcy?
I don’t think anybody on the third floor is in a position to speak with authority about what the financials are. I don’t have access to the level of detail that Chris Harte and Avista has. I came in this morning and the lights were on. In the end, none of us really knows what the challenges will be. … Nobody predicted this a year ago.

What do you know about the Blackstone Group?
I don’t know what to make of it. It doesn’t really concern me to be honest with you. We were bought by a private equity firm a year ago (Avista), and that was a gamechanger in itself. … We’re still hiring, we’re building a TV studio, we’re doing a whole bunch of other things … We’re doing all the things we should be doing to still be around and still be a vital part of this community.

UPDATE 7: The Blackstone Group dropped from tenth to 35th in the global mergers and acquisitions rankings after the collapse of the Yahoo! deal this weekend:

Yahoo! deal collapse hits rankings for Morgan Stanley and Blackstone

By Shanny Basar
05 May 2008

Morgan Stanley has moved down one place and the Blackstone Group has dropped from tenth to 35th in the global mergers and acquisitions rankings after the collapse of this year’s largest announced acquisition.

At the beginning of February, Microsoft announced a $44.6bn (€28.8bn) bid for Yahoo! using Morgan Stanley and Blackstone as advisors.

The deal was the largest global acquisition announced this year according to Dealogic, the investment banking research provider.

Yahoo! appointed Goldman Sachs, Lehman Brothers and Moelis & Company, the independent boutique set up last year, for its defense.

The Yahoo! board rejected the deal in February and again this weekend despite Microsoft improving its bid.

Update 8: Meanwhile, Avista Capital Partners, which owns the Strib, announced Friday that it's buying part of Bristol-Myers Squibb:

NEW YORK - (Business Wire) Bristol-Myers Squibb Company (NYSE:BMY) announced today it has signed a definitive agreement to sell its ConvaTec business unit to Nordic Capital Fund VII (“Nordic Capital”) and Avista Capital Partners (“Avista”) for $4.1 billion subject to adjustments based on ConvaTec’s audited 2007 financial statements and closing working capital. ConvaTec is a world leader in the development and marketing of innovative wound therapeutics and ostomy care products.
...
Nordic Capital and funds associated with Avista have severally guaranteed the obligations of the newly formed purchaser under the purchase agreement. The purchaser has entered into a fully committed loan agreement which provides for funding by the lenders with no material conditions other than the conditions under the purchase agreement and customary conditions relating to the delivery of closing documents and financial information as well as conditions related to the status of the purchaser.

UPDATE 9: Strib union memo reacts to news (hat-tip: Brauer again):

Guild Members:

By now, most of you have heard of the Star Tribune's engaging Blackstone to advise Avista in restructuring its debt. The New York Post story hinted that the company is headed toward bankruptcy — which Chris Harte denies. What does this mean for Guild negotiations?

It means they will still start later this week, on schedule.

We have been keenly aware of the company's financial situation for some time. Nothing has changed with that. We will continue to focus on our issues and make every attempt to get the best deal possible given the current climate.

The principal lesson we have learned in the past several months is that we should expect the unexpected. We will maintain that point of view, and keep ourselves aware of the implications of whatever financial crises — real or imagined — crop up. The timing of the Post story days before negotiations are about to begin seems a bit curious to us. However, we need to stay calm and go about our business in negotiations.

Graydon Royce and David Chanen, co-chairs

Earlier updates and a primer on Blackstone after the jump ...

UPDATE 1: Wow, the Strib just updated their article with new information, and it does not look good (emphasis mine):

"The Star Tribune currently has sufficient liquidity and is current on all its debt payment obligations," Harte said in a statement issued Sunday afternoon. Pressed further, he said the newspaper would not miss a debt payment this year unless things worsened.

Harte said he is in frequent contact with lenders, including Credit Suisse.

None of them wants to take over the newspaper, he added, which could be a possible outcome of a bankruptcy filing.

Unless things worsened? What kind of weasily words are they? Of course things are going to worsen. The economy is in the toilet, especially for media. It's widely known that the second quarter is going to be particularly painful. It's almost as if Harte is conceeding and giving his paper the scoop that it's going under.

Strib media writer Matt McKinney fires a shot across the bow of the new boss:

Blackstone cuts a high profile among Wall Street's private equity firms thanks to its CEO, Stephen Schwarzman, who last summer rode a wave of unflattering media coverage following revelations that he made $677.2 million in cash taking his company public while holding shares worth nearly $8 billion. Schwarzman's haul inspired congressional hearings for higher taxes on private equity firms.

UPDATE 2: As noted by a commenter, the Strib is about to go into labor negotiations. This has given rise to suspicions that Sunday's action was some kind of scare tactic on the part of management. While I don't think that's what's behind this--there's way too much shrapnel for this to be an idle threat--here is the part of McKinney's article that talks about that, which also includes a view of what it must be like in the Strib's newsroom today:

Earlier this year, the company hired Restructuring Associates Inc., a Washington, D.C., consulting firm, to work with the Star Tribune's unions to identify areas for savings and prepare for upcoming labor negotiations. Contract negotiations will begin this week with the Newspaper Guild, the paper's largest union, which represents employees in the newsroom and editorial departments as well as some in promotions and circulation.

"It's kind of disquieting to read about your company in the New York Post," said Graydon Royce, cochair of the guild's Star Tribune unit. "We have to find out what the truth is here, because we're going into negotiations and it's a period that's probably one of the most critical in the Star Tribune's history."

UPDATE 3: This is not a good day to wake up at the Star Tribune. If you go to Google News and type in "Blackstone Group," this is what you get:

Star Tribune denies bankruptcy report

Bizjournals.com, NC - 30 minutes ago
The Minneapolis Star Tribune may be on the verge of bankruptcy, according to a report in the New York Post on Sunday. The paper disputed the report, ...

Minneapolis Star Tribune Disputes Being 'On the Brink of Bankruptcy'
Wall Street Journal - 1 hour ago
AP MINNEAPOLIS -- The Star Tribune of Minneapolis has hired a private equity firm to advise it, but disputed a published report suggesting it is "on the ...

'Star Tribune' Disputes Report It Is Near Bankruptcy
Editor & Publisher - 11 hours ago
MINNEAPOLIS The Star Tribune has hired a private equity firm to advise it, but is disputing a published report that says it's "on the brink of bankruptcy. ...

Star Tribune publisher denies dire report
Pioneer Press, MN - 59 minutes ago
By Nick Ferraro The publisher of the Star Tribune on Sunday denied a New York Post report that the Minneapolis paper is on the brink of bankruptcy. ...

Star Tribune Hires Blackstone for Restructuring Help
New York Times Blogs, NY - 3 hours ago
The Minneapolis Star Tribune said Sunday that it has hired the Blackstone Group to evaluate its finances, following a report in The New York Post that the ...

Star Tribune hires Blackstone Group to analyze its finances
Trading Markets (press release), CA - 6 hours ago
-- Faced with sliding advertising revenue amid a continuing slowdown of the newspaper industry, the Star Tribune said Sunday that it has hired an adviser to ...

Strib Bankruptcy Article Fallout: Who is the Blackstone Group?
Minneapolis City Pages, MN - 11 hours ago
Sunday was anything but a day of rest for the Strib. First came a report in the New York Post alleging that the newspaper was on the verge of bankruptcy and ...

UPDATE 4: More explanation courtesy of a knowledgable source: The Strib may be able to restructure the balance sheet somehow in order to avoid a full bankruptcy filing, but that means you have to get cash from somewhere. Now, who is going to inject cash into a highly-leveraged asset with declining cash flows? No one. So what do you do? You can try to get Avista to give up some of their equity ownership to the banks in exchange for their debt (that's what they mean by restructuring the balance sheet) but the banks don't want to own a slice of a newspaper that can't turn itself around. They would rather take control and try to sell it for cheap. Just like a house in foreclosure. In that case, Avista's investment would be wiped out.

The fact is that you don't hire Blackstone to restructure your balance sheet when you have sufficient liquidity to continue meeting your obligations. It's like someone with a large credit card bill, who tries to negotiate with the credit card company to erase some of his debt. Now, that person may not have to file bankruptcy, but they certainly don't believe they have enough cash to pay back the debt. Otherwise, what basis do they have to ask the creditor for some concessions.

UPDATE 5: Chris Harte issued this memo to Strib employees this morning (Hat tip: David Brauer at MinnPost):

This is not the way I prefer to greet you on Monday morning, but a story in the New York Post over the weekend requires a direct and corrective response. I am writing to reassure you unequivocally.

The Post reported that the Star Tribune has failed to meet its debt obligations and alleged that we are "on the brink of bankruptcy." We have no idea where this information came from, but we do know it is not accurate.

The facts are that the Star Tribune currently has sufficient liquidity and is current on all its debt payment obligations. You know that we face declining ad revenue, and you are well aware of all the steps we have been taking to get our cost structure in line with current revenue shortfalls. There is absolutely no doubt that we are in the toughest times this company and this industry has ever faced. But it is quite a leap to say we are "on the brink of bankruptcy."

We talk to our lenders frequently and constructively about the state of our business. They know that our business is in a different place than when they loaned us money, and they know why. We are in this together, and our lenders very much still want us to succeed.

As part of our problem-solving process, we recently hired the Blackstone Group to help us evaluate alternatives to our current capital structure, but that hardly merits a conclusion that we are near bankruptcy. In fact, Blackstone has substantial expertise in balance sheet restructurings through means other than statutory proceedings like bankruptcy.

None of the current discussions we are having about our financial structure has any effect on our current operations. We are generating positive cash flow and paying our bills.

The most important thing we can do right now is to stay totally focused on keeping our 140-year-old franchise in its market leadership position by putting out the best and most comprehensive news and Internet products in this region. We cannot be distracted by speculation about our future.

It's true we have big challenges and many struggles ahead. I can't begin to predict how all this will play out, and neither can anyone else — especially the New York Post. But I can predict that our best strategy for a successful outcome is to stay focused, day-in-and-day-out, on building our business through outstanding service to our readers and advertisers — regardless of what hand the economy deals us. I know with high confidence that we have the people and the resources to do that.

Chris

A PRIMER ON THE BLACKSTONE GROUP:

The Blackstone Group is hardly the paragon of good corporate citizen. In fact, it has been accused of predatory investing by no less of an authority than the Star Tribune:

The Blackstone Group by itself reportedly has $98 billion worth of assets under management. KKR has $86 billion. About $600 billion in buyouts were announced in the first half of 2007. Yet there are honest questions regarding the role of what is often predatory investing. …

Although many of us might rejoice at the sudden reversal of fortunes for the predatory investors, we may find that the bulk of this misfortune will fall upon others, rather than to the managers of the private investment funds. The two founders of Blackstone, for instance, sold $2.6 billion of stock during that company’s initial public offering in June.

From Wikipedia:

Blackstone Group (NYSE: BX) is a company that provides private equity, financial advisory, and investment management services. The company is based in New York City, with offices in Atlanta, Boston, London, Hamburg, Paris, Mumbai and Hong Kong. One of the world's largest private equity firms, it is part of the migration of companies from public to private hands — a total of some US$370 billion in deals in the United States in 2006.

From Blackstone's website:

Restructuring and Reorganization Advisory

Our restructuring and reorganization advisory operation is one of the leading advisers to companies and creditors in restructurings and bankruptcies. Since 1991, we have advised on more than 150 distressed situations, both in and out of bankruptcy proceedings, involving more than $350 billion of total liabilities.

You can find the NY Times take on the company here.

If the Blackstone Group is supposed to bring stability, it might not help that it's under attack itself:

NEW YORK (MarketWatch) -- Alliance Data Systems Corp. said late Friday [April 18] that it is suing Blackstone Group LP for $170 million over the private-equity giant's alleged breach of a merger agreement.

ADS 58.83, +0.42, +0.7%) , a Dallas-based marketing services firm, also formally announced the termination of the planned acquisition by affiliates of Blackstone. The deal, announced in May 2007, was said to be worth over $6 billion.

TIMELINE OF TROUBLES AT THE STAR TRIBUNE

Blotter recently reported that another 58 layoffs were coming at the Strib.

January saw the release of a grim memo about the paper's future.

December was marked by the resignation of embattled publisher Par Ridder.

For a complete summary of the troubles leading up to this, complete with an inside-the-court view of the Par Ridder case, read Trials and Stribulations.

Posted by Kevin Hoffman at May 5, 2008 5:26 PM | Comments (2)

 

Strib Publisher Chris Harte responds to NY Post bankruptcy allegation

Filed under: Media

Star Tribune Publisher denies bankruptcy allegations, acknowledges hiring Blackstone Group.

As soon as I saw the news that the NY Post was reporting that the Strib was near bankruptcy, I emailed Editor Nancy Barnes and Publisher Chris Harte to get comment. Harte responded with a surprising swiftness, sending me an email within an hour, with instructions to a staffer to give me the official statement (which I got within a matter of minutes). Considering I got the email from Harte at 6:08 p.m. on a beautiful spring Sunday, I'm guessing that this is something he's in a hurry to knock down. I reproduce the statement here in its entirety:

From Chris Harte, Star Tribune Publisher:

On Sunday the New York Post reported that the Star Tribune has failed to meet its debt obligations and alleged that we are “on the brink of bankruptcy.”

The facts are that the Star Tribune currently has sufficient liquidity and is current on all its debt payment obligations.

While it is true that we face declining ad revenue—as do most major metropolitan newspapers—we have been working aggressively to get our cost structure in line with current revenue shortfalls. This is the most challenging time our industry has ever faced, so we are in constant and constructive communication with our lenders about the state of our business.

We recently hired the Blackstone Group to help us evaluate alternatives to our current capital structure, but that hardly merits a conclusion that we are near bankruptcy. In fact, Blackstone has substantial expertise in balance sheet restructurings through means other than statutory proceedings like bankruptcy.

It’s important to emphasize that none of the current discussions we are having about our financial structure has any effect on our current operations, which are generating positive cash flow. We are focused on maintaining the high quality of our journalism and community service as we have for the past 140 years.

Here's what he's responding to:

The New York Post is reporting that the Strib is on the verge of bankruptcy, sourcing unnamed insiders:

May 4, 2008 -- The Minneapolis Star Tribune, reeling under a heavy debt load and plummeting advertising sales, is on the brink of bankruptcy, The Post has learned.

One of the nation's top dailies, "The Strib," as it is known to readers in the Twin Cities, recently hired the Wall Street powerhouse Blackstone Group to restructure its balance sheet after failing to meet its debt obligations, according to people familiar with the company.

The broadsheet is unlikely to shutter its doors, but its creditors, including the banking giant Credit Suisse Group, figure to eventually end up controlling the paper. Down the road, the creditor group could then sell it after dramatically cutting costs.

The private-equity firm Avista Capital Partners, run by former Credit Suisse deal maker Tom Dean, purchased the Star Tribune from the McClatchy Co. in 2006 for $530 million. The New York firm, which put up $100 million of its own money and borrowed the rest, stands to lose its entire investment, sources said.

The Strib has finally posted an article acknowledging the tumultuous day's events:

Star Tribune's owner hires restructuring adviser to look at finances By MATT McKINNEY, Star Tribune

Last update: May 4, 2008 - 7:23 PM

Faced with sliding advertising revenue amid a continuing slowdown of the newspaper industry, Avista Capital Partners, the owners of the Star Tribune, have hired a restructuring adviser to examine the company's finances.

The hiring of Blackstone Group, a New York private equity firm and financial adviser, was not accompanied by a bankruptcy filing, nor has the Star Tribune missed any payments to its creditors, said Star Tribune publisher and chairman Christopher Harte.

Posted by Kevin Hoffman at May 4, 2008 6:25 PM | Comments (0)

 

Star Tribune "is on the brink of bankruptcy," NY Post reports

Filed under: Media

New York Post articles claims Star Tribune on verge of bankruptcy, has hired Blackstone Group

The New York Post is reporting that the Strib is on the verge of bankruptcy, sourcing unnamed insiders:

May 4, 2008 -- The Minneapolis Star Tribune, reeling under a heavy debt load and plummeting advertising sales, is on the brink of bankruptcy, The Post has learned.

One of the nation's top dailies, "The Strib," as it is known to readers in the Twin Cities, recently hired the Wall Street powerhouse Blackstone Group to restructure its balance sheet after failing to meet its debt obligations, according to people familiar with the company.

The broadsheet is unlikely to shutter its doors, but its creditors, including the banking giant Credit Suisse Group, figure to eventually end up controlling the paper. Down the road, the creditor group could then sell it after dramatically cutting costs.

The private-equity firm Avista Capital Partners, run by former Credit Suisse deal maker Tom Dean, purchased the Star Tribune from the McClatchy Co. in 2006 for $530 million. The New York firm, which put up $100 million of its own money and borrowed the rest, stands to lose its entire investment, sources said.

In response to the article, Strib Publisher Chris Harte has issued a statement, which you can read here.

Take the jump for analysis, local reax, and updates ...

In some ways, it's not surprising: We knew times were tough for newspapers, and that was before the Par Ridder judgment put a very big financial albatross around the Strib's neck. Still, to see it reported in a New York newspaper, albeit with unnamed sources, is telling. Expect to see some kind of announcement from 425 Portland Avenue on Monday.

Media wonk David Brauer has insider analysis here.

Reax thread on MnSpeak here.

Strib Timeline

Blotter recently reported that another 58 layoffs were coming at the Strib.

January saw the release of a grim memo about the paper's future.

December was marked by the resignation of embattled publisher Par Ridder.

For a complete summary of the troubles leading up to this, complete with an inside-the-court view of the Par Ridder case, read Trials and Stribulations.

Posted by Kevin Hoffman at May 4, 2008 5:20 PM | Comments (0)

 

Strib Shocker: Sex column spiked over blowjob description

Filed under: Media

What's the point of being a sex columnist if you can't even report proper fellatio techniques?

Sexpert Alexis McKinnis, author of “Alexis on the Sexes," seemed to be making that point exactly in her personal blog when she complained to her readers that her most recent column was "canned and replaced" by editors at Vita.mn due to her "apparent over-descriptiveness on how to give proper head to the man in your life."

I'm bitter, very bitter, about it right now, but my editor has my back on this one (as usual) and hopefully the informative column will see the light of day soon.

It's especially puzzling because the piece wasn't any more descriptive than my cunnilingus or anal sex tutorials. I've actually written about giving girl head more than once, but I guess someone had a problem with penises. I rather like them myself.

When the decision was made to yank the problematic penis column, that left a big gaping hole that needed to be filled. So the faux alt cobbled together online reader feedback from a recent column on "the Shocker." According to Wikipedia, the Shocker involves "inserting the index and middle fingers into the vagina and the little finger into the unwitting anus, hence the 'shock'…" Or, as one Vita.mn reader so delicately put it: "two in the pink, one in the stink."

Good thing we didn't have to read that offensive column about blowjobs!

Lucky for us, the nannies at the daily are hard at work removing the offensive language in the original column, which is set to debut Thursday. Vita.mn editor Simon Groebner tells us in an email that Alexis's column "was not killed or censored," but rather "it was held for revision." When pushed for further information about these so-called revisions, Groebner went frigid, writing:

I'm not gonna discuss my edit process. This is a non-issue. You can read it on Thursday at www.vita.mn; let me know what you think.

Next we reached Alexis herself, who had touched off the whole issue by blabbing on her blog. Apparently the ensuing days had quelled her outrage, because she sent us an email implying that somehow we were the ones in the tizzy. She asserted that it was all a tempest in a teacup, which was in stark contrast to the much more bombastic language she had used in the comments section of her own blog:

Well, by definition it was canned, censored and edited. And the quality was perfectly fine, unlike the replacement that ran, for which I am still receiving emails and text messages from friends to the effect of "what is this craptastic thing?" If they're saying what's on their mind, I shudder to imagine what the rest of my readers were thinking.

Posted by: Alexis | April 19, 2008 at 08:56 PM

We wish we could share with you her exact words from the email, but we can't, because Alexis threatened to sue us if we did.

It's ironic that a columnist from the Star Tribune--a newspaper that depends on freedom of speech and frequently advocates for more openness from public officials--would threaten legal action against us for reporting the news. It's a stark departure from Editor Nancy Barnes recent column, "How we respond to reader concerns," in which she promised that the local daily would be more open about how its decisions are made:

To help communicate what we are doing and why, top editors will share this column with me most weeks. We will also be available in a blog online, to post comments and hear your thoughts. You can find us at www.startribune.com/blogs/editors.

Some readers have told me that they no longer know where to call with corrections and concerns. We have staff members available to take your calls at 612-673-4414. If they cannot handle your concerns, they will find someone who will. In addition to these efforts, I have asked all top editors to be responsible for responding to reader concerns regarding their sections and any changes they are making. You'll find those names and numbers here.

We called the numbers and got the runaround. You'd have more luck trying to shake information out of MnDOT.

But what do you expect from a faux alt? It wants to be edgy, as long as it doesn't offend anybody. It wants to have a sex column, as long as it isn't too sexy. And it opposes censorship, unless it's doing the censoring, in which case it will threaten to sue you.

We haven't seen this much hypocrisy over a blowjob since the Republicans went after Bill Clinton!

We eagerly anticipate the expurgated column Thursday, but in the meantime, those who want to read a real sex columnist should check out Dan Savage.

Posted by Beth Walton at April 23, 2008 8:30 AM | Comments (14)

 

Obama bin Laden

Filed under: Media

Here's a video clip of MediaNews Group CEO William Dean Singleton's unfortunate verbal gaffe referenced in yesterday's post:

(Cribbed from ASNE Reporter)

Posted by Paul Demko at April 16, 2008 9:37 AM | Comments (0)

 

Lean Dean wants to hunt down Obama bin Laden

Filed under: Media

William Dean Singleton, CEO of MediaNews Group, apparently isn’t too good with names. At the Associated Press’s annual luncheon in Washington yesterday, Singleton asked Sen. Barack Obama if he was willing to commit more troops to Afghanistan given that “Obama bin Laden is still at large.”

Singleton later apologized for the verbal gaffe, which Obama reportedly laughed off. But the slip of the tongue by the head of the country's fourth largest newspaper chain, which includes the St. Paul Pioneer Press, might be revealing of his own political views.

As Westword points out, Singleton hasn't been shy about wielding his media clout to support the GOP. In 2004 he overruled the Denver Post's decision to endorse John Kerry over Singleton's personal friend Dubya. More recently he's used the Post to attack Democratic Colorado Governor Bill Ritter.

Which makes the Denver daily highly unlikely to support the senator from Jalalabad. But will Singleton's political proclivities have any impact on which candidate the Pioneer Press chooses to endorse?

Posted by Paul Demko at April 15, 2008 10:14 AM | Comments (0)

 

C.J. scolded by editor after mocking conjoined twins in gossip column

Filed under: Media

I don't mean to pile on. We've recently written several poisoned-penned posts about Star Tribune gossip columnist C.J. Jonathan Kaminsky called her out for a host of sins before giving her a backhanded compliment for writing a nice piece on departing WCCO weatherman Paul Douglas. Then Beth Walton mocked C.J.'s recent email exchange over who deserves credit for the Douglas scoop, as well as her admission that she doesn't know how to use spellcheck. But C.J.'s recent episode of nastiness, which culminated in an apology from the editor in today's Strib, is just too egregious to ignore.

It all started when C.J. was at the Mall of America for a media event. It happened to be the same day that Abigail and Brittany Hensel, conjoined twins, were out for a day of shopping. For those who don't know of the Hensel twins, here is a primer. The takeout: The family tries to maintain as normal a life as possible, but has done limited media appearances to help dispel some of the curiosity and explain how painful it is for the twins to be stared at or otherwise treated as a spectacle. The most cringe-worthy party of a documentary made about their lives is when a Spanish TV cameraman happens upon them and starts taping them without their permission.

So when C.J. spots the twins at MoA, what does she do? She stalks them then writes about it. Here is the part of the column that describes the embarrassing episode, in its entirety:

Just a day at the mall

The Guinness World Records guy wanted a gander at Minnesota's adult conjoined twins.

Guinness adjudication exec Danny Girton Jr. heard about them Sunday while he was at the Mall of America to declare that Duff Goldman, of Baltimore's Charm City Cakes and Food TV's "Ace of Cakes," had baked the world's biggest cupcake. Girton learned that Abigail and Brittany Hensel had walked by me and Todd Walker, one of my Fox 9 contributor pals.

"Now, there's something you don't see everyday," I remarked to Walker, returning to our previous conversation as the twins walked by Barnes & Noble. Seconds later, they came into view for Walker, who instantly became the personification of flappable: "Did I just see that? Did I just see what I saw?"

When Girton figured out what Walker was hyperventilating about, the Guinness guy wanted to see for himself. Walker agreed to take Girton to find them, and I tagged along.

Not long into the pursuit, my conscience told me: "You can't do this. This seems wrong." It's not as though I was seeking an interview or was going to be gauche enough to ask if I could videotape them. Since it was obvious they get gawked at enough, with many MOA shoppers barely able to contain themselves, I dropped out of the chase.

"Don't pretend you didn't partake in the pursuit," said Walker said. "We threw Duff, the Food Network stuff and Sandra Lee to the wind. You were terrible." He exaggerated but more fairly observed: "You just shrugged your shoulders and said, Yeah, well, as if somebody walked by wearing pink shoes on the wrong feet. You were quite funny, your cavalier attitude, about the whole thing."

It's called being accepting.

"Don't forget to write what you said when I called you later and asked if I had really seen [conjoined] twins."

I reminded Walker that we couldn't all be born cute, little blondes. Besides, I've seen Fancy Ray.

C.J. is at 612.332.TIPS or cj@startribune.com. More of her attitude can be seen on Fox 9 Thursday mornings.

Apparently, the father of the twins saw this odorous piece of writing and contacted C.J. After he made clear his disappointment, C.J. issued an apology in her column. But she clearly took a smartass approach and almost argues against the father in the course of saying sorry (emphasis added):

An apology to the twins

Through their father, Mike Hensel, I apologized to Brittany and Abigail, the conjoined twins who live in rural Minnesota, for the item I wrote last week.

I regret that the item's intent -- the need to accept differences in people and not to follow them around in public, at a place such as the Mall of America -- was misconstrued by their family and friends. It did not occur to me they were uncomfortable with media attention. They have participated in lots of interviews. They've appeared on "TLC" and "Oprah." They've been written about in Newsweek, the UK's Telegraph and Daily Mail. In February, they appeared in the City Pages' blotter blog.

Let me clear something up, C.J. We did not contact the family when we wrote our item, so it should not be used as a club against Mr. Hensel. Secondly, do you not recognize the difference in tone between this from City Pages:

These two young women have remarkable spirit and their story should serve as an inspiration to anyone tempted to think his or her life is too challenging.

And this from your gossip column:

"You just shrugged your shoulders and said, Yeah, well, as if somebody walked by wearing pink shoes on the wrong feet. You were quite funny, your cavalier attitude, about the whole thing."

Which is why Strib editor Nancy Barnes rightly apologized in her column Sunday:

Last week, our gossip columnist, C.J., wrote an item regarding a set of conjoined twins, Abigail and Brittany Hensel, whose family has tried to enjoy as normal a life as possible. They want to live without everyone talking about them. In this instance, C.J. talked about spotting the pair and trying to follow them at the Mall of America and her internal debate with herself when she realized that was the wrong thing to do. We later learned that the article upset the family and the twins.

Now, C.J.'s column often ticks off its targets; it's part of the give and take of a gossip column. However, in this instance, we could have handled this better. Nobody on staff intended any harm, but in writing about this incident, we crossed over the line between covering gossip and being unintentionally hurtful to people in their private lives. This was a voyeuristic bit of writing that we should have kept out of the paper.

We did double harm by issuing an apology that, in part, suggested it was the family's fault for misunderstanding our intent. We fumbled our handling of this and I apologize to the family.

Hopefully, this post will not compound the problem by shedding even more attention on this unfortunate episode. If there is a moral to this story, it is this: If you see the Hensel twins in public, show some class and leave them alone.

Posted by Kevin Hoffman at April 13, 2008 2:42 PM | Comments (4)

 

The Real Scoop: Strib Columnist C.J. doesn't know how to use spellcheck?

Filed under: Media

In a time when news is unfortunately judged by what organization is quickest to the web, Minnesota Monitor has published a spirited e-mail exchange between its writer, Paul Schmelzer, and the Star Tribune’s gossip columnist, C.J., over who scooped whom.

It’s pretty funny considering the lackluster news value of the actual "scoop" itself.

The debate: Who was first to publish that WCCO meteorologist Paul Douglas’ bio was taken off the station’s website?

from Paul Schmelzer
to CJ
4/7/2008 3:19 PM

Hey C.J.
With all due respect, I'm wondering if maybe you didn't break news about Paul Douglas' bio being scrubbed from the 'CCO site. Maybe Strib timestamps don't work properly (or maybe the timestamp changes when you make updates?), but I mentioned it at 2:45 on Friday (yours says 4:47). At any rate, it's a minor scoop either way, and congrats on your recent coverage of the shakeup there.
http://minnesotamoni...
cheers,
Paul

from CJ
to Paul Schmelzer
Tue, Apr 8, 2008 at 11:14 AM

I broke it.
Don't believe me. Ask my editor Kathleen Clonts 673.7301.
One colleague congratulated me on the scoop as I was walking down the hallway, about 15 minutes before CBS confirmed it for the story Justin posted. ...

You, do realize the last sentence of your e-mail is charmingly passive-aggressive.

With all the blogs and monitors out there, I'll take a minor scoop. Were it truly "minor" you would not bother to minimize it. Based on the reactions of readers, it was not exactly minor. Excuse my typos. I don't know how work the e-mail spell checker. ~ C.J.

And it goes on and on. "Aggressive aggressive" C.J., as she calls herself, writes three more e-mails to Schmelzer and threatens to put the exchange in her next column.

Nonetheless, C.J.'s column published Thursday mentions nothing of the sort, giving the Monitor the "Scoop" in the latest round of this downright silly journalistic race.

Maybe C.J. was too busy trying to work her spell check?

Minnesota Monitor: 1
Star Tribune: 0

Can't wait for C.J.'s next column.

Posted by Beth Walton at April 10, 2008 10:19 AM | Comments (4)

 

Covering Her Beat

Filed under: Media

C.J. is well known for her prickly--some might say tacky, others might say merely annoying--on-the-clock behavior. I tend to think of her as the Sid Hartman of local TV news coverage: Been doing it forever, bullies people into talking, and is a total suckup to power.

(Sid, by the way, wrote an absolutely amazing column a few weeks back about how he singlehandedly brought the Lakers to Minnesota in the late 1940's, and how it was really he who was running the team as the general manager spent all his time vacationing in Hawaii.

And when I went to Minneapolis Tribune editor Gideon Seymour and sports editor Charles Johnson and told them that the area could get its first major league sport and that Chalfen and Berger weren't going to be interested unless I was a part of it, they said to go ahead, but don't write about the Lakers. Max Winter was brought in as general manager, but everybody knew I was involved, and since Winter spent most of the winter in his Honolulu home, I ran the team.

Score-settling with some dude who's probably been dead for 30 years. Honestly, it's like the most amazing thing ever.)

C.J., like Sid, takes her beat seriously. Unlike Sid, whose books are ghostwritten and whose columns are choppy at best, C.J. seems to be something of an actual writer.

To wit: When the biggest story on her beat in decades went down--the summary firing of the most celebrated local TV news personality of the last twenty years--she was there first to break it (noting that Paul Douglas' name had been taken off the WCCO website's masthead), and then to follow up with a funny, revealing, and forward-looking piece on the man himself.

Douglas said that when Black Monday first happened, his and Laurie's first reaction was: We're moving.

Then they got "stuck in a massive two-hour traffic jam on the Washington beltway after landing at Dulles, and took it as a sign," he wrote.

"We both love to travel, but Minnesota will always be our base, where we hang out most of the year. Too many friends, too many business partners, too good a work ethic, weather far too interesting for me to ever leave again."

Basically, the point here: C.J. wrote a nice column.

It should be said, for the purposes of full disclosure, that I may be biased: When I was in probably third grade, Paul Douglas came to my school and gave a speech to the gathered assembly. Afterward, he took questions. Someone asked him what they should do to get to where he was.

"Honestly," I recall him saying, "and my bosses would be furious if they knew I was telling you this, but read a book."

I've had a soft spot for him ever since.

Posted by Jonathan Kaminsky at April 8, 2008 11:16 AM | Comments (8)

 

Partial Pulitzer list leaked: Strib gets no love UPDATED

Filed under: Media

The Pulitzer Prize committee, which usually leaks like a sieve, has managed to keep the nominations relatively close to the vest this year. But Editor & Publisher did manage to obtain a list of the finalists in four categories, including "Breaking News," for which the Strib was hoping to get honored for its 35W bridge coverage. Somewhere, Nancy Barnes is angry.

Investigative

1. The New York Times -- Toxic Pipeline
2. Chicago Tribune -- Product Safety
3. The Denver Post -- Destruction of Evidence

Explanatory

1. The New York Times -- DNA
2. The Boston Globe -- Global Warming
3. The Oregonian -- Computer chips

Breaking News

1. The Washington Post -- Virginia Tech
2. The New York Times -- Bronx fire
3. Idaho Statesman -- Larry Craig

National Reporting

1. The Washington Post
2. The New York Times
3. Chicago Tribune

Update: It's official, the Strib loses to Washington Post in Breaking News, one of six Pulitzers taken home by the D.C. daily.

Confirmation neither the Strib nor Pi-Press were finalists for Breaking News category:

Also nominated as finalists in this category were: The Idaho Statesman Staff for its tenacious coverage of the twists and turns in the scandal involving the state's senator, Larry Craig, and The New York Times Staff for its swift, penetrating coverage of a fire in the Bronx that killed nine persons, eight of them children.

Posted by Kevin Hoffman at April 7, 2008 10:22 AM | Comments (0)

 

NYTimes "Blogging Kills" article misses key point: health insurance

Filed under: Media

I noticed this New York Times article reprinted in today's Star Tribune. It essentially argues--with much hemming and hawing--that the demands of trying to keep up with the fast-paced world of being a professional blogger are driving people into an early grave.

Here's the nut, where the reporter marshals his (flimsy) evidence:

Two weeks ago in North Lauderdale, Fla., funeral services were held for Russell Shaw, a prolific blogger on technology subjects who died at 60 of a heart attack. In December, another tech blogger, Marc Orchant, died at 50 of a massive coronary. A third, Om Malik, 41, survived a heart attack in December.

Other bloggers complain of weight loss or gain, sleep disorders, exhaustion and other maladies born of the nonstop strain of producing for a news and information cycle that is as always-on as the Internet.

This is by far the most arresting quote:

“I haven’t died yet,” said Michael Arrington, the founder and co-editor of TechCrunch, a popular technology blog. The site has brought in millions in advertising revenue, but there has been a hefty cost. Mr. Arrington says he has gained 30 pounds in the last three years, developed a severe sleeping disorder and turned his home into an office for him and four employees. “At some point, I’ll have a nervous breakdown and be admitted to the hospital, or something else will happen.”

OK, I think the overall premise of this article is total hooey--to argue that blogging is somehow more physically demanding and health-destroying than, say, working at the dock, building a home, driving a commercial truck, or any one of a thousand other careers is ridiculous. But I do think that blogging has the potential to cause health problems, just for different reasons.

The Times article is all about the rise of the professional class of bloggers. It claims there are "several thousand, even tens of thousands" of professional bloggers who are potentially at risk. But I would argue they're not at risk from the job itself, but rather from the lack of health care coverage that is often the case with being a freelancer.

The rise of blogs--and with it the diminishing of traditional journalism outlets which has led to widespread layoffs throughout the industry--has essentially turned many formerly health-insured journalists into freelance and contract workers who aren't given health insurance unless they pay steep premiums for it out of pocket. The local examples are numerous, whether it be MinnPost or Minnesota Monitor. This mirrors a national trend--correct me if I'm wrong, but I believe that major blogs that offer health insurance coverage comparable to what one would find working at a newspaper are the exception rather than the rule.

This issue hits home for me, because one of our writers recently suffered a health issue and had to be immediately hospitalized. Recovering from surgery required a week of convalescence, during which blogging or any other kind of work was virtually impossible (and who wants someone blogging on Percocets anyway?)

Because he worked for a "traditional media" outfit, he had health insurance that covered him, and he was able to take sick days and continue to get an uninterrupted weekly pay check. I can only imagine the impact this health crisis--relatively minor, in the grand scheme of things--would have had on his young family had he been a blogger.

Posted by Kevin Hoffman at April 7, 2008 9:37 AM | Comments (1)

 

David Carr: from public access TV to the Times

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