This past spring we noted the New York Post story that the Star Tribune was on the verge of bankruptcy. Star Tribune publisher and chairman Chris Harte denied that report, but acknowledged that management had 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.
David Brauer has reported on the continuing deterioration in the Star Tribune’s financial condition here (including the text of Chris Harte’s most recent memo to Star Tribune employees) and here. Brauer’s reportage appears to me to confirm the substance of the New York Post’s story. If I understand Brauer’s reports correctly, the Star Tribune has avoided bankruptcy so far through the forebearance of creditors.
The Star Tribune is shackled with union contracts that prevent it from taking actions that would be in the best interest of the newspaper both financially and journalistically. Moreover, the paper relentlessly editorializes in favor of forces that undermine its economic viability. One can’t help but wonder whether killing the paper’s editorials and like-minded columns might win back some subscribers and improve the paper’s prospects.
In today’s paper, for example, metro columnist Nick Coleman addresses Minnesota’s prospective budget deficit. Coleman berates Governor Pawlenty as a prisoner to the “deceitful” no new tax “cult” that has supposedly cut income taxes for the wealthy while raising fees and property taxes on everyone else.
In this world the time is always ripe to raise taxes, and the wealthy somehow escape paying fees or property taxes or their fair share of income taxes. Coleman criticizes Pawlenty’s opposition to a federal bailout of the states on the ground that Minnesota contributes more in federal taxes than it receives from the federal government. He implies that that’s a bad thing.
Unfortunately. Coleman doesn’t stay on the thought long enough to explore it. In a column that might have taken 15 minutes to write, Coleman forgets to reiterate his charge that Pawlenty’s opposition to higher taxes was also responsible for the collapse of the 35W bridge. Surely the time has come for Coleman to turn his financial acumen to salvaging the Star Tribune.
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