As Asheville Citizen-Times employees wait for lay-off notices, Gannett death-knell echoes

From a bleak break-down of Asheville Citizen-Times' owner Gannett's finances:

Now, financial sources contend, it's too late. Because of the credit crisis, an unfortunate bunching of credit maturities and a debilitating number of so-called negative-basis trades featuring credit-default swaps -- all in addition to the industry's secular and cyclical downturns -- Gannett as we know it will be lucky to last through June 2011. "They painted themselves into a corner," the distressed-debt expert says of Gannett management. "They have to raise more than $400 million between now and the middle of 2011 in a market where, frankly, many of their bondholders would rather they default."

...

Next month, after Gannett releases second-quarter results, its ability to put off a covenant trip will be much more apparent. The release will be followed by an earnings call that opens with prepared statements from CFO Martore and, if he's back from a temporary medical leave announced June 15, CEO Dubow. The Q&A session that traditionally wraps up this call will likely include some of the most pointed questions ever directed at the company, and the executives fielding them can certainly be excused for wishig Neuharth was at their side. But the public face of Gannett hasn't participated in quarterly calls for more than a year -- the annual meeting is his thing -- and it's doubtful he would have much to add if he were there.

Yes, newspaper companies are in such trouble that even Gannett, arguably best of breed, faces challenges few imagined two years ago. Yet the most immediate challenge has little to do with the news business -- just as this story has little to do with the news business -- but features forces so opaque and arcane that Gannett's thinly staffed dailies will be hard-pressed to cover them.

 On the impending Gannett lay-offs.

Comments

[Tim Peck]

What is a "secular downturn"?