From Levine Breaking News:
LBN-COMMENTARY By MICHAEL SIGMAN:
The alternative newspaper chain that publishes the dominant weeklies in Chicago, Atlanta, Washington D.C. and Tampa filed for Chapter 11 Bankruptcy this morning, sending shock waves through newsrooms around the country. But anyone who's followed the consolidation of this industry shouldn't have been surprised in the least.
Virtually all the nation's major-market alternative weeklies are now part of highly-leveraged chains, and must fork over huge interest payments to bankers and venture capital outfits before spending a dime on operations.
These bankers, of course, are the very institutions melting down before our eyes, with no bottom in sight. When the dust eventually settles, the entire print industry -- battered already by the challenges of the Internet and rising manufacturing costs -- will need to refigure its business models. We can only hope they'll remember that expansion through leveraging can be not just risky but lethal.