A depreciating asset

The financial problems of the Minneapolis Star Tribune made the news over the weekend when the New York Post reported that the paper was on the verge of bankruptcy. Star Tribune publisher and chairman Chris Harte has denied that report, but acknowledged that management has retained the Blackstone Group to restructure the Star Tribune’s balance sheet.

Avista Partners purchased the Star Tribune for $530 million only two years ago. The purchase price represented a 50 percent markdown over the price paid for the paper by McClatchy Co. eight years earlier. Since Avista purchased the paper in 2006, it has continued to shed readers and advertisers. Avista has now written down the value of its $100 million investment in the Star Tribune by 75 percent, and the debt that accounted for most of the remainder of the purchase price paid by Avista is valued like junk:

To finance its acquisition of the Star Tribune, Avista borrowed $340 million that was valued recently at 56 cents on the dollar, according to bid prices for “institutional leveraged loans.” A subordinate loan of $96 million trades for 10 cents on the dollar.

The Star Tribune’s sports page must be one section for which readers buy the paper. Today sports columnist Patrick Reusse reflects on his 20 years with the Star Tribune, his 40 years as a local sports reporter and columnist, and the Star Tribune’s financial difficulties.

One reason that the Star Tribune continues to shed readers is its left-wing editorial bias. Since the memory of man runneth not to the contrary, the paper’s editorial page has served as a reliable voice of the Democratic Party calling relentlessly for more government and higher taxes in one of the most highly taxed states in the country. For years its two metro columnists (Doug Grow and Nick Coleman) served as counterparts to the paper’s editorial voice. The moment the Star Tribune added (my friend) Katherine Kersten to its lineup in 2005, Coleman decried Kersten’s hiring in a bizarre message to Jay Rosen.

Although Kersten has done some of the paper’s best reporting over the past three years, she is treated like a foreign body that must be expelled from its host. Kersten’s columns on the Tarek ibn Ziyad Academy, for example, which I wrote about in posts collected here, have provided a window onto a local scandal hiding in plain sight. The second of her two columns on TIZA was featured for a full day on Drudge and must have generated more traffic to its site than the Star Tribune has seen before or since. Yet not a single one of the Star Tribune’s reporters or editors has seen fit to follow up Kersten’s story with a look at the rest of the Twin Cities Muslim-oriented charter schools. The subject is obviously too hot.

The Star Tribune has now posted a letter to the editor calling for Kersten’s ouster from the paper on account of her two columns on TIZA:

In response to questions prompted by Katherine Kersen’s recent columns on Tarek ibn Ziyad Academy (TIZA), I decided to visit the school myself.

What I learned during a tour late last month is that none of Kersten’s concerns that the charter school is promoting religion in violation of a state law that prohibits public schools from doing so is valid.

What I did see was excellent teachers hard at work in the classroom focused on improving student achievement. I saw engaged students of different religious and cultural backgrounds learning reading, math, government and science. I spoke with parents, teachers and administrators who all stressed their high standards for TIZA students.

While an outsider, or someone like Kersten who is trying to validate a predetermined conclusion, might be tempted to brand Tarek ibn Ziyad as an “Islamic School” because it leases space from the Muslim American Society of Minnesota, the school, like other charter schools in Minnesota that lease space from churches, is a separate entity. It does comply with federal law that requires all schools to accommodate a student’s right to practice his or her religion. And unlike other charter schools that have faced financial and other administrative challenges, the school was recognized with a 2008 School Finance Award from the Minnesota Department of Education for its “sound fiscal health and financial management policies.”

Kersten’s reckless journalistic standards have diminished this paper’s credibility. Worse, they have threatened the safety of the children and staff at the school, which has been forced to take extra security measures in the wake of recent death threats. While I value a broad range of opinions from a variety of perspectives, I value the facts even more. Kersten’s gross distortion of the facts in this case should compel Star Tribune management to ask for her resignation.

REP. MINDY GREILING, DFL-ROSEVILLE; CHAIRWOMAN, HOUSE K-12 FINANCE DIVISION

The letter fails to cite a single fact disputing Kersten’s columns. It is more or less notable only as an act of thuggery on the part of its author and the Star Tribune editor of the letters section. It is difficult to imagine the paper running a comparable letter taking issue with Coleman or his like on the paper’s editorial board.

The Star Tribune provides a sad illustration of how a newspaper can become a corrosive force on the political and civic life of the community it serves. The financial difficulties of the Star Tribune prompt the thought that the Twin Cities and the state of Minnesota would be improved by the paper’s demise.

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