Structural changes in advertising habits weigh on the newspaper industry just as much as on the paper industry. Declining print advertising revenues now forced Journal Register Company to file for Chapter 11. Again.
Journal Register Company, a subsidiary of Digital First Media, New York, provides local news and information in 10 US states. The company’s more than 350 multi-platform products reach an audience of 21 million people each month. Since 2009, the company managed to double its digital audience and boost digital revenues. Still, from 2009 to 2011 Journal Register Company’s print advertising revenue declined 19% and print advertising represents more than half of the of the Company’s revenues, John Paton, CEO of Digital First Media, writes in his blog.
Overall print advertising for the newspaper industry declined approximately 17% over the same time period, according to the Newspaper Association of America.
Since 2009, when the Journal Register Company exited its last Chapter 11 restructuring, printing facilities have been reduced from 14 to 6; 9 of the 50 owned facilities have been sold and 8 distribution centres have been outsourced. As well, both print circulation and circulation revenue have also declined over the same time period, Paton continues.
“After much consideration, the Board of Directors concluded a Chapter 11 filing was the best course of action for Journal Register Company,” Mr. Paton said in a statement. “As difficult as they are, the steps we announced today are steps that will ensure the Company’s future.”
“We expect the auction and sale process to take about 90 days, and we are pleased to announce the Company has a signed stalking horse bid for Journal Register Company from 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC,” said John Paton.
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