Thursday, July 24, 2008

Banks calling the shots at the Press Herald?

The Press Herald's parent still struggling to pay back loan it took to buy the paper and other Maine assets.
"Union officials said Blethen Maine executives told them at a meeting Friday that the company has to slash Maine payroll by more than 30 jobs to avoid defaulting on Times Co. loans, which come due in September. The Times Co. cut 31 jobs at the paper on July 1. The Seattle Times Co. also owns the Kennebec Journal in Augusta and the Morning Sentinel in Waterville, as well as

It wasn't the first the Maine union has heard of the Seattle company's precarious position with lenders. According to two officials of the Portland Newspaper Guild, officials at the Times Co.'s Maine subsidiary have told them in previous meetings that the company's bankers are now requiring the Times Co. to clear spending decisions with lenders."

Assuming it can pacify the union in Maine, the Times Co. might be lucky to recoup a small fraction of the $230 million Maine purchase a decade ago. a worst case for the Blethen family would be the need to sell the entire company. Through a longstanding agreement, New York-based Hearst has first right to bid on the family's Seattle Times Co. stake. CEO and Seattle Times Publisher Frank Blethen has vowed in recent years never to sell the company but also has left open the possibility of doing just that. For the Times Co., that decision may now rest as much with bankers as with the Blethens.
- LATimes Pressmen Forums

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