Blog outlines where newspaper cuts will come

In the second part of an an examination of the financial woes of the newspaper industry, former San Francisco Chronicle and Chicago Sun-Times editor Alan D. Mutter, outlines what is likely to happen at papers across the country:

Companies like GateHouse Media, Lee Enterprises, McClatchy, MediaNews, Morris, New York Times Co., Philadelphia Media, Star Tribune and Tribune are obligated to improve their profitability in the coming years to repay the principal and interest on money they have borrowed to make acquisitions.

In the event the publishers are unable to meet those obligations, their creditors will move in to slash expenses; attempt to sell off assets to generate cash, and take every other step necessary to sustain the properties as going concerns.

This will last as long as the newspapers continue to generate operating profits. But it is highly unlikely in this environment that any creditor would provide additional cash to prop up a money-losing newspaper.

In other words, a newspaper that cannot sell enough advertising or cut enough expenses to sustain profitable operations is not likley to make it to the other side of 2009.