The first domino has fallen.

The Tribune Co., publisher of what used to be some of America’s best newspapers and operators of 23 television stations, has filed for bankruptcy, citing nearly $13 billion in debt compared with $7.6 billion in assets.

Let’s make book: Who’s next?

Could it be McClatchy, the nation’s third-largest newspaper chain, which is looking for a buyer for its flagship, the Miami Herald? Or the New York Times Co., struggling with debt and trying to cop a $225 million mortgage on its year-old grand edifice of a headquarters in Manhattan to get more cash on hand?



Hey, how about Lee Enterprises, which owns 54 daily papers in 23 states? In the second quarter of 2008, Lee’s net income was down 87 percent to $2.8 million in part due to charges based on the falling value of its assets. What about Gannett? In October, Gannett said that “advertising revenue at its publishing business fell nearly 18 percent during the July-September quarter compared with the same period last year.”

Will it be E.W. Scripps, owner of the 149-year-old Rocky Mountain News, which Scripps offered to sell after reporting an $11 million loss through the first nine months of this year?

The newspaper business climate is the worst ever:

U.S. newspaper advertising revenue collapsed by nearly $2 billion, or 18 percent, in the third quarter, according to the Newspaper Association of America, an industry group. Even online ad revenue made a small U-turn for the second quarter in a row. The year-on-year quarterly percentage decline is the worst since since the NAA has been keeping such records and represents an increasingly rapid deceleration that began in the third quarter of 2006, when total ad spending dropped 1.5 percent.

Tribune is filing under Chapter 11, which permits reorganization, rather than Chapter 7, which oversees liquidation of assets. Bankruptcy presumably provides equitable and fair treatment of all parties, but especially secured creditors.

But a reorganized Tribune — or any newspaper corporation or entity — following a bankruptcy proceeding is unlikely to produce fair and equitable treatment of 1) the public dependent on good, sound journalism or 2) the experienced journalists who produced that product who have been laid off or bought out over the past five years.

Won’t the emergent Tribune Co. — publisher of the Chicago Tribune and the Los Angeles Times, both journalistic shells of their former selves — merely be a reorganization of its current and failing business model? Will the idiot, er, “media titan,” who played a significant role in the Trib’s financial demise, still be in charge?

How about this crock ‘o’ candor from Sam Zell, who bought Tribune with other people’s money:

Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers. Unfortunately, at the same time, factors beyond our control have created a perfect storm — a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt. [emphasis added]

Newspaper companies, especially the larger ones, own regional newspapers. These are the newspaper that in the past have had the necessary resources and journalistic clout to effectively hold government (and let’s include corporations) accountable.

No more. These big metros — The Times, The Washington Post, the LA Times, the Miami Herald, Hartford Courant, Boston Globe, Dallas Morning News, Seattle Times and the Post-Intelligencer, the Rocky Mountain News, the Denver Post, and so many other great American newspapers — no longer produce what they once did. Oh, they win Pulitzers. But careful checks of the size of their geographical coverage, their shrinking news holes, the increasingly shallowness of beat coverage, the reduction of bureaus, the increase in one-source stories, and the diminishing readership area redefined by circulation cutbacks all lead to a public less well served.

Thus, the inability of regional newspapers to practice good journalism benefits those governments and corporations whose motivations may not always be in the public’s interest. The public’s the loser here.

Instead of improving those papers, corporations have turned them into cost-cutting enterprises, shedding staff and circulation. Now those corporations are actively seeking to unload big regional metros — The Boston Globe, the Miami Herald, the Rocky Mountain News — all to shed costs. If your daily paper is a big metropolitan daily, it’s for sale — you just haven’t been told that yet.

Anyone in the market for an entity that’s losing gobs of money, has fired or bought out its best artisans, and has produced no credible response to its problems other than cutting more costs? Think you can turn that entity around?

So what should we watch as this impending wave of bankruptcies washes ashore?

• Did top management get canned? Who replaced the outgoing miscreants?

• Did independent, local entities buy controlling interests in local and regional newspapers?

• Did different business models emerge?

• What role, if any, did courts play?

• What become of the experienced journalists no longer employed by newspaper corporations? (More on that in a future post. They’re doing some interesting things.)

• Would you buy a newspaper from the reorganized corporation?

The news biz as we’ve known it is about to go belly-up. What will replace it, and will the public benefit?