Showing posts from January, 2009


Financial pages are full of developments and changes at newspaper companies and these are being commented upon anxiously by those in the industry. Unpleasant conditions certainly abound, but these development are not indications that the industry is dead or dying in the near future. What they signal is that things which worked in the past are not working now, that newspaper companies are badly in need of restructuring, refocusing, and renewal, and that the boards of the companies and the company managers are taking badly needed action.

The techniques for restructuring are no mystery. First, you need some cash. This can be obtained by attracting new capital through investment or loans. New York Times Co. did this recently by borrowings $250 million from Carlos Slim. Other firms are looking for friendly investors with liquidity.

Another way of raising cash is by turning assets into cash. A classic move made by many types of firms is the sell their building and lease back any space that is…

Last Train to Belmont?

In its infinite bureaucratic wisdom, the New York Metropolitan Transportation Authority has decided to eliminate race-day train service to Belmont Park. The service, provided by the Long Island Railroad, has for many years permitted racing fans from Manhattan and Brooklyn to use mass transit and arrive right at the entrance to the Belmont grandstand. In fact, my own initial exposure to racing was via this very train; as a high school student, I'd make the trip from Manhattan and hope the mutuel clerks would ignore the fact that I was only 16 (and looked 14) and let me get my $2 bets down.
It was on the train that I got my first lessons in handicapping, from grizzled veterans of the track who were only too happy to show off their expertise.  And the 45-minute trip provided time to explore the mysteries of past performances. It's pretty hard to focus on the Racing Form while you're driving to the track.

But, in an age of declining race track attendance generally, and of ever g…

On to the Two-Year-Old Sales

The last of the big mixed sales -- Keeneland January -- has just ended, with the expected horrific results.  Only 213 of the 407 horses catalogued for Saturday, the final day of the sale, managed to find a new home, even at bargain-basement prices. The rest were either scratched or failed to meet their much-reduced reserves.
It's pretty depressing, actually, to look through today's results from Keeneland. Many, many horses going for $1,000 or $1,500. For the day as a whole, the average price for those that sold was $8,431 and the median a depressing $4,000.  I'd be surprised if more than a handful of the horses offered today did as much as break even for their sellers, after taking into account stud fees, the cost of raising foals, and sales-related expenses.
For the six-day sale as a whole, the numbers were truly awful.  The gross sales dropped by more than 50% from last year, to a puny $32.8 million.  And despite a continuing shrinkage of the catalog -- two years ago the J…


The bankruptcy filings of the Minneapolis Star-Tribune and Tribune Co. are cast by many as a sign of the continuing decline of the newspaper market. However, it is noteworthy that neither firm is owned by a company with a newspaper heritage, but by firms in the newspaper business primarily for financial gain. The Tribune’s owner is from the real estate business and the Star Trib’s is from private equity.

There is no doubt that the newspaper business is facing a difficult time now, but the business origins of the owners are important because their perceptions of bankruptcy, how the community will react, and how the company will be seen afterwards are colored by the norms and mores of those business fields.

Newspaper companies have long played special roles in communities, exercising social and political influence, and promoting corporate responsibility, accountability, and community standards. Publishers and editors have typically sat with the other civic leaders on boards and committees…


The announcement that the Seattle Post-Intelligencer is being put up for sale—a legally required step before shutting down the paper because it is in a joint operating agreement—has stunned many of its journalists. Their reactions, in news stories and their own blogs, reflect the continuing state of denial that their profession exists within a news business affected by financial and economic forces. Or, at least, their belief that it should be immune from them.

It should comes as no surprise that Hearst Corp. is seeking to end publication of the P-I. Its joint operation with Seattle Times has been an unhappy marriage and it has not been financially effective for many years. Changes made in the agreement in recent years have been insufficient to turn the operation around and the paper and JOA operation have continued to be a financial drain on its participants.

A similar offer-for-sale-before-shutting-down process is underway in Denver, where the Rocky Mountain News is likely to cease pu…


There is one upside to all the advertising disappearing from newspapers……Consumers can now really see what they are paying for.

Opps, that’s a BIG downside.

With the effects of economic downturn clearly hitting retailers everywhere, they have slashed their advertising budgets and are advertising as little as possible. For the first time in my lifetime it means you can turn several pages in many newspapers without seeing an advertisement. When I read the Boston Globe on Tuesday (January 7), it essentially had 2 pages of ads in the 10-page A section, 3 pages of ads in the 16-page B section, and 1 page in the 8-page C section. It had no ads on page 1 (although it has been announced they will start doing so soon) and the daily classified section is no longer being published on weekdays. What was left was editorial content. Unfortunately, what was there wasn’t pretty.

In reading the paper I realized that about half the stories were from news agencies and services and that I had read many of t…

The Future of Racing?

That's Sportsman's Park in Chicago, where demolition started yesterday, but it could be a number of other tracks in the not too distant future.  Racing needs to shrink, concentrate, and develop a focus. And that means that there won't be much of a justification for keeping a lot of tracks alive, as ever more betting shifts online.  This year's significant decline in handle, concentrated in the last few months of the year, will accelerate the process, inter alia by forcing Frank Stronach's Magna to sell of its tracks.  A year from now we may be looking at a very different industry.