FYI on USA Today Staffer Change

Jen: Alexandra Nicholson who was working in USA Today's communications and pr department is changing duties and is heading over to digital marketing as manager, social media strategist.

GateHouse Narrows Q4 Loss, Sees Revenue Improvement

Fitz: At the beginning of February, the chief of GateHouse Media’s single-biggest investor, Wesley R. Edens of Fortress Investment Group, told a venture capital conference that the chain and another business in the fund’s portfolio were showing improvement. That proved to be on the mark late Thursday when GateHouse reported its Q4 numbers.

As we report at E&P’s home site, GateHouse recorded a net loss, but nothing like the year-ago quarter’s red ink, which included a big goodwill and masthead impairment charge.

GateHouse recorded a revenue decline in Q4 of 10.5% from a year-ago, with print ad revenue still weak. (Classified -- not a big factor in GateHouse’s mostly smallish 87 dailies and several hundred non-dailies -- was down 16.6% from a year ago and local was off 10.2%.)  But the overall revenue decline was an improvement on Q3’s 14.9% year-over-year decline. GateHouse didn’t say, but we looked it up: year-over-year revenue declines in Q2 and Q1 2009 were both 15%. More below the fold:

MediaNews Group Races Out Of Bankruptcy

Fitz: Affiliated Media’s reorganization plan won the stamp of approval from a bankruptcy court judge in Wilmington, Del., Thursday, allowing the MediaNwes Group holding company to emerge from Chapter 11 just six weeks after seeking protection.

Under the plan in the prepackaged bankruptcy, secured lenders holding about $950 million in debt will exchange it for about 89% of equity in the post-bankruptcy company. In court filings, the company said lenders will recover from 29% to 36% of their claims. Subordinated noteholders, no surprise, didn’t make out nearly as well. Their $326 million in claims gets than an 8.25% equity stake, a recovery of about 2%.

Dean Singleton (left) stays in control of MediaNews as well. Singleton has already picked his four people on the seven-seat board of directors: Singleton himself; his President Jody Lodovic; Affiliated’s general counsel, Howell Begle; and the founder of a chemical business, John Huntsman.

The court’s okay turned Thursday into payday for Lodovic, who gets a $500,000 bonus because the plan was approved before the end of March.

At Torstar, Different Currency, Same Q4 Story

Fitz: Stop me if you’ve heard this one: A diversified media company swings to a Q4 profit despite a continuing revenue decline, but sees a ray of hope in the moderating rate of revenue loss among its newspapers.

That was Torstar Corp.’s story Wednesday, as it reported overall net income of C$57.4 million, or 73 Canadian cents a share, compared to a year-ago loss of C$213.9 million,  or $2.71 a share. The 2008 Q4 results included large impairment charges and investment write-downs. (US$1 = C$1.03)

At Star Media Group, which includes Canada’s largest daily, The Toronto Star, revenue fell 4.1% to C$129.0, an improvement over the 10.8% decline of the group over the previous three quarters.

Similarly, Toronto Star print ad revenues dipped 6.5% in Q4 -- the best performance of 2009, Torstar said. Print ad revenue fell 17% at the paper through the first nine months of 2009.

National advertising revenue was actually up, but retail and classified continued to be weak, Torstar said. Digital ad revenue was flat from a year ago, itself an improvement since it was down for the previous three quarters.

CEO David Holland was at pains to point to the progress Torstar made in chopping away at its debt, which fell by C$111 million during the year to C$516 million by the end of 2009.

Bay Street was already high on Torstar, bidding it up as much as 15% Tuesday after a strong buy recommendation by TD Newcrest. By the end of Wednesday’s session, Torstar (TSB: TOR) was at C$7.77, a gain of 52 cents or 7.2%. TSB has traded in a 52-week range of C3.93 to C$8.10.

Morris Publishing Out Of Bankruptcy

Fitz: The Fitz & Jen Morris Watch is over: The parent of The Florida Times-Union in Jacksonville said Tuesday it’s completed all the details to emerge from bankruptcy reorganization.

Morris lenders took a substantial haircut in the prepackaged bankruptcy filed just six weeks ago. Noteholders are swapped $278.5 million of senior subordinated notes for $100 million of new secured notes that mature in 2014.

Other Morris family companies kicked in $85 million in a capital contribution to Morris Publishing, and repaid about $25 million in intercompany debt due the newspaper publisher. Morris Publishing also repaid $19.7 million I other secured debt plus accrued interest, using cash on hand.

The result, says Morris Publishing Chairman William S. Morris III is “a significantly de-leveraged balance sheet."

Monday Morning Links

The New York Times Co. is partnering with RMG Networks in a deal that will put the newspaper’s articles, photos and video clips on 850 screens in coffee shops and retail locatiions in New York City, Boston, Chicago, San Francisco and Los Angeles, Joseph Tartakoff reports at paidContent.

Why would someone own a newspaper, anyway? The Earl explains ownership motivations. (The Earl Blog)

Mobile-first alert: More than a quarter of American adults read the news on their cell phones, according to the Pew Research Center. Among young ‘uns under 50 that figure jumps to 43%. (AP)

What do European newspapers know about getting paid for online content that U.S. dailies don’t? Advertising Age’s Emma Hall reports from London.

New York Times Co.’s Pension Picture Likely Signals Industry Improvement

Fitz: Like automakers and steel producers, newspapers are burdened by pension costs more than most industries, the legacy of past union contracts and generous white collar retirement packages. Practically nobody still offers defined-benefit pensions of course, least of all newspapers, but the unfunded pension obligations still haunt balance sheets. And the federal government is insisting businesses get their pensions funded within the next six years.

Last year at this time, that left newspapers looking pretty bad overall.

But now The New York Times Co. is first out of the gate with its annual report to the SEC, which must include discussion of pension status.

As we report at the E&P home site, pension pressures on the Times Co. eased during 2009, helped by a rising stock market that overcome the dead weight of rock-bottom interest rates.

The Times Co. estimated its unfunded pension obligations as of Jan. 1, 2010 as $420 million. A big number, but an improvement on the $535 million underfunding as of Jan. 1, 2009. (Last year, the Times Co. reported their unfunded status as $300 million, which reflected a one-time “temporary valuation relief” allowed by the government.

The Times Co. says it has no mandatory pension contributions coming due this year, but expects to kick in from $60 million to $80 million to its plans to narrow the funding gap. It also will contribute approximately $22 million to $28 million to The New York Times Newspaper Guild pension plan based on contractual obligations, the SEC filing said.

U.S. Trustee Wants Look At ‘Fraudulent Conveyance’ In Tribune Bankruptcy

Fitz: The U.S. trustee assigned to Tribune Co.’s Chapter 11 bankruptcy case is asking  the court to order an investigation into the deal engineered by real estate mogul Sam Zell (laughing, left)  that took the Chicago media giant private with a ton of debt. The trustee’s request to U.S. Bankruptcy Judge Kevin Carey puts him on board with a group of bondholders who allege the transaction was a “fraudulent conveyance,”  that is, a deal that was designed to lead the company into bankruptcy sooner or later.

The holders of so-called PHONES bonds issued back in 1999 are far back in the line of creditors who would split Tribune’s post-bankruptcy assets. If they are successful with their fraudulent conveyance claim they could cut out the senior bank lenders who have the first claim to the assets. The banks loaded Tribune with leverage knowing the debt would bring the company to its knees, the bondholders allege.

All this is happening on the eve of a crucial hearing Thursday that could determine whether Tribune emerges from bankruptcy by May, as it has said -- or languishes in more litigation. Chicago Tribune reporter Michael Oneal has the details here.

‘St. Louis P-D’ Guild: We’ve Got A $500,000 War Chest For Corporate Campaign Against Lee

Fitz: In its latest newsletter to members, the St. Louis Newspaper Guild fleshes out a few details of the “corporate campaign directed at the economic interests of Lee Enterprises" it promised last week. The local said its executive board approved an allocation of $500,000 as an “initial budget” for the campaign to pressure Lee as contract talks get more heated at the St. Louis Post-Dispatch. The local said it will be able to tap “strong support, including financial support,” from its parent union, the Communications Workers of America. 

We will launch a full-fledged corporate campaign against Lee only if the company terminates our contract and imposes wage and benefit cuts,” the newsletter said. “This step will be taken only after our members vote to authorize such action.” (Left: Retired union P-D workers protest changes in health plan last December.)

The Guild said it didn’t want to tip its hand by getting too specific about its strategy, but the long list of skills it is recruiting for the effort gives you an idea. Among them:

“Investor relations and financial analysis: People who can talk the talk with shareholders, creditors, financial analysts, brokers, and others in the stock and credit markets about Lee management’s performance, the company’s financial prospects and the effect of a labor dispute on future performance.

“Creative advertising: Those with an interest in developing advertising for broadcast, direct mail and on-line media.

“Social media and online skills: Members who can understand the use of Twitter, Facebook, blogging and search engine optimization, and who can develop and manage websites.

“Advertiser contact: Persuading advertisers to support our cause.

“Circulation: Analyzing Lee’s system of maintaining circulation and its vulnerabilities.”

Last week, the union said talks were turning “more acrimonious” and that Lee negotiators were hinting an impasse was near. Lee is seeking a 15% wage cut for the first year of the new contract, followed by 5% reductions in the second and third years, the union says. Lee has a policy of not commenting on labor issues.

Former Ex-Gannett Publisher Bill Keating Sues Advisor For Not Dumping GCI Fast Enough

Fitz: Gannett Co. was very, very good to Bill Keating back in the 1980s and ‘90s. It put him in charge of the Detroit JOA, and moved him to Cincinnati as publisher of the Enquirer and the chain’s Midwest papers. He was Gannett’s general counsel for a spell.

But Gannett stock (GCI) was very, very bad for his portfolio, so Keating and his wife are suing their investment advisors -- claiming they didn’t dump GCI as aggressively as he wanted. The advisors, William T. Sena Sr. and William T. Sena Jr.,  also sat on their hands when Keating ordered them to liquidate stock in First Third Bank as quickly as possible, he and his wife claim in a lawsuit filed in Hamilton County, Ohio.

The Daily Bellwether blog (via Romenesko) dug up the unreported story of this lawsuit filed Jan. 6.

All told, the Keatings contend, their $20 million portfolio took a $6 million hit on GCI and First Third.

The advisors deny they ever got direct instructions to liquidate aggressively. "There are no documents which say sell Fifth Third,” the Senas lawyer said in court, according to Daily Bellwether. “There are no e-mails that say sell Fifth Third or Gannett. There is nothing in writing that exists that says sell Fifth Third. All we have is the oral representations supposedly in place to sell Fifth Third.” Besides, the lawyer said, Keating could have easily dumped the stocks on his own.

Documents in the case are locked on the Web site of the court’s clerk, with each reading it is locked because it may contain “sensitive information.”

Friday, GCI closed at $14.29, up 8 cents, or 0.6%. There was no trading Monday because of the Presidents Day holiday. Since hitting is 52-week low in March 2009, GCI is up 242%.

Activists Won’t Go Away In Morris Bankruptcy

Fitz: Morris Publishing Group is supposed to emerge from its brief stay in Chapter 11 protection next Wednesday -- but two gadflies from St. Augustine, Fla., remain determined to derail the prepackaged reorganization.

“This is not just about dollars and cents. This is about our community here, and we’re not being served well by the St. Augustine Record,” Ed Slavin told Fitz & Jen late Friday. As we’ve reported, Slavin along with his business partner Judith Seraphin tried to get intervener status in the Morris bankruptcy, arguing that under Morris family ownership the quality of the chain’s newspapers has deteriorated to the point they no longer serve as the public’s eyes and ears on corruption and malfeasance.

Thursday, Judge John S. Dalis, who is presiding over the Morris case from U.S. Bankruptcy Court in the company’s hometown of Augusta, Ga., rejected their attempt. He ruled they had no standing to object to the Morris plan, which has the blessing of its principal creditors. They are not creditors, the judge said, and they haven’t asserted some reason they should be allowed to intervene.

So Friday, the pair were at it again, filing a motion to reconsider the denial.

“The court has a mandatory duty to protect the public interest in every bankruptcy, but nowhere more when newspapers protected by our First Amendment, are in decline and being run into the ground by the Debtors,” their motion states, referring to Morris.

A lot’s at stake in this particular BK, the motion asserts: “Our Constitution is in shreds if Debtors are permitted to escape from their debts and to change nothing and to do nothing to improve the quality of the newspaper in our Nation’s Oldest City.”

(Clarification: Seraphin is CEO of Global Wrap, which wraps buildings, mostly during construction, and Slavin is the company's CIO. Slavin blogs  at Clean Up City of St. Augustine, Florida.)