The Fourth Estate Sale

Decimated by corporate overlords, the only hope for our local newspapers may be the auction block.

"We used to have two or three reporters at our meetings; now we usually just have one from the Forum," Parkland Mayor Michael Udine says. "And that's what is showing up in the main newspaper."

The dearth of serious reporting has also affected the courthouse, says Broward Public Defender Howard Finkelstein.

"I pick up the paper every morning and can't believe how little there is to it anymore," Finkelstein says. "The Herald comes to the house, and I read it, but it doesn't have any presence in the courthouse anymore. [The Sentinel] doesn't seem to have the interest in going after big-time issues that require work. They want to write quick things for the blog. It just looks like it's falling apart to me."

Finkelstein says he's worried about the future.

"The media is it," he says. "When something is wrong, where else can I go? To power brokers? The speaker of the House? They don't care."

It's not like the newspapers made an idle decision to cut staff and coverage ­— it's born of very real financial crises. The owner of the Herald, McClatchy, is racked with debt, and the Sentinel's parent, Tribune Co., recently filed for Chapter 11 bankruptcy. The newspaper, according to sources, still made $50 million in 2008, though that's far less than in years past. The Los Angeles Times, also owned by Tribune, reported last month that it would make $100 million in 2008, down from $240 million the previous year.

The real problem is that Tribune's debt service alone runs to about $1 billion a year. Newspapers are still viable businesses, but their resources are being sucked into the black holes of the corporations that own them.

The Sentinel and the Herald are both being decimated by their corporate parents, which are now headquartered in Chicago and Sacramento, respectively. A glaring example of this came last year, when McClatchy CEO Gary Pruitt was paid an $800,000 bonus while the company's stock went into the toilet and job cuts were being planned.

McClatchy's stock price, which was at more than $70 a few years ago, recently dipped below a buck. Investors simply don't believe that the debt-laden company will survive — and they are probably right.

Those are reasons the Sentinel and the Herald need to be sold now — before the overlords in Chicago and Sacramento suck more life out of them.

Such a move isn't just smart for the newspapers and the cities they cover but for the creditors. They'll likely get a more substantial return on their investment and won't destroy the value of the newspapers over the next year or so while paying off interest payments.

At this point, it's not just a business decision; it's a moral imperative.

Don't get me wrong; selling the newspapers, while the best option, is still a rancid one. Buying at the top and selling after steep losses is never fun.

And there's the problem of finding a good buyer, or at least a willing one, considering newpapers haven't been selling in this terrible environment. The Herald, for instance, has been in talks with a pair of potential buyers that make any journalist shudder: the Fanjul sugar family and the Miami-based development company Related Group.

Ideally, groups of more independent investors will buy the newspapers. But that can happen only if the corporations do the right thing: put their still profitable newspapers up for sale now and help return them to doing what they were meant to do: cover the news. Hollywood may have entered a new era under Mayor Peter Bober, but newspaper readers wouldn't know it.C. Stiles

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