Residual Forces

That’s what I’d call losing $700 million in 8 years.

MINNEAPOLIS (AP) - McClatchy Co. said Tuesday it will sell the Star Tribune newspaper to the private equity firm Avista Capital Partners for $530 million, a sharp drop from the $1.2 billion it paid to acquire the flagship property just eight years ago.

What’s funny is listening to some of the employee reactions on the morning news. “But I have 30 years in” “My pension” The usual Big Labor mentality. THEY ARE more important than the company staying profitable.

What is rather interesting is that it was just last week that the Editor quit too. Is it possible that he knew the sale was coming, and might know the future of the paper? An unbiased editorial board? Maybe, just maybe, this new comer to news, Avista, wants to give a balanced view of the news.

I suppose that would cause employees to freak out, after all, they have been doing what they do for decades.

The newspaper industry has long been fighting circulation declines. More recently, classified advertising - a pillar of the newspaper business model - has come under attack by cheap or free Internet ads for jobs, cars, and homes. The Star Tribune has been no exception.

No wonder they hate blogs so much, we may be cutting into the bottom line for them. After all, we do encourage people not to subscribe or advertise in that rag.

So was buying the Star Tribune in 1998 a mistake for McClatchy? Pruitt said it wasn’t. He said Avista paid an attractive price for the paper, and that the Star Tribune was the only paper it could sell at a loss to get a tax benefit at a time when McClatchy needs one. And he said McClatchy has collected more than $1 billion in cash flow from Star Tribune operations during those years.

New names for the MSM, Big Media. Big News.

“But there is no doubt we’re selling the paper for less than we bought it for,” he said. “The Star Tribune had several good years, where profits increased, and then in recent years it has lagged as revenues have underperformed.“

Gee, I wonder why?

McClatchy and Avista both said the Star Tribune’s union contracts would remain in place.

So much for trying to create a better business model. Merit based employment sure would make sense for a company performing so poorly.

Star Tribune columnist Doug Grow said workers were scrambling around the Internet trying to understand who Avista is.

“Everything we’ve heard from McClatchy recently is ‘Hey, we’re all in this together. We don’t do layoffs.’ Blah blah blah BS,” he said.

Ohhhhh, poor baby.

Newspaper industry analyst John Morton found the sale “inexplicable and disappointing.”

“The Minneapolis Star Tribune has a good reputation, has always had a good reputation. It is the kind of newspaper that you would have hoped a company like McClatchy would continue to own,” he said.

(coffee snorting out nose) No wonder the newspaper industry is dying, if this guy thinks this is the perfect paper for a company to own. Let me guess, he has LOTS of friends that wrk there, and he is trying to protect them by saying this was a mistake?

“Clearly what is happening to McClatchy is that they are much more concerned about their overall financial performance than they are about publishing newspapers, the way I read it,” Morton said.

Um, they have been just ‘publishing’ newspapers for 8 years. They have destroyed a profitable newspaper in doing so. It is a mere rag now.

No one is buying what they are selling, well, not everyone is that used to. This is a chance to try a different approach, that is provide content that is so dearly wanted by some in Minnesota. As it currently is, the Strib only offers content for some of Minnesota.