Minnesota’s largest newspaper has filed for bankruptcy. The Thursday filing comes just hours after MinnPost media reporter David Brauer talked about the paper’s looming financial problems with The UpTake’s Mike McIntee on a new show called “Quick On The UpTake”
In this interview, Brauer provides a good explanation about why the paper will have to file, what happens next and who the winners and losers might be.
The paper filed for chapter 11 bankruptcy, which means operations at the paper can continue as normal. Brauer noted that the paper has not been paying some of its creditors for some time now. Employees have been under a wage freeze for 18 months and the paper has bought out many long-time employees over the last year.
Bankruptcy documents filed in New York state indicate the paper is more than $500 million in debt. The company owes more than $1 million to its paper supplier, Abitibi/Bowater.
Other large debtors include printers, The Minnesota Timberwolves, and a subsidiary of the paper’s former owners, McClatchy Interactive. McClatchy sold the paper to Avista Capitol several years ago. At the time McClatchy sold, it was paid less than half of what it paid for the Star Tribune.
Pay cut talks with union workers at the Star Tribune recently broke down. Like many newspapers, the Star Tribune has been trying to cut costs as advertising revenue has plummeted.