They've been cutting jobs, reducing publication days, combining forces with other papers to share printing and distribution resources, renegotiating labor union contracts, cutting the fees they pay the AP, renting out or selling their offices, and refinancing as much debt as they can, even if that means higher interest rates.
But when, even after all those moves, a newspaper company can't make its debt payments, what is it to do?
Management at one large daily, the Minneapolis Star-Tribune, has simply suspended its payments. The $9 million quarterly payment due earlier this week remains unpaid. Apparently, the paper is betting its creditors will not force it into bankruptcy at a time when renegotiating new terms might prove a better long-term strategy than liquidating the paper's assets for cents on the dollar.
Throughout the industry, multiple credit downgrades have become the rule, not the exception. The giant McClatchy chain, staggering under its massive $1.8 billion debt acquired by purchasing Knight-Ridder two years ago, recently announced it had renegotiated new terms with its creditors to avoid default, but at increased interest rates.
Insiders are watching two other biggies, MediaNews Group and the Tribune Company, in the wake of reports that they may be very close to defaulting on their debt payments.
The fundamentals seem stronger at a company like The New York Times, but as we noted earier this week, they, too, are taking a hit in the stock market, reducing their market cap and making it potentially more difficult to find financing for the acquisitions and investments in online media that many believe the Times will need to make to survive over time. The Times' stock lost 6.8 percent today to close at $13.86, amid reports the company's stock may be downgraded to junk status soon.
Meanwhile, its market cap has now dipped below $2 billion.