Associated Press, Published September 29 2009
Strib exits bankruptcyMINNEAPOLIS – The Star Tribune emerged from bankruptcy protection Monday with its main lenders becoming the new owners and its debt slashed by 80 percent.
Out from Chapter 11, the Strib, as it is known, can now make decisions without a judge’s supervision, as Minnesota’s largest newspaper and the nation’s 14th largest on weekdays tries to ride out an advertising drought and boost revenue in print and online.
The move was largely expected after a federal bankruptcy judge in New York approved the Star Tribune’s reorganization plan Sept. 17. The newspaper had filed for bankruptcy protection eight months earlier, saddled by debt from Avista Capital Partners’ 2007 purchase of the newspaper from the McClatchy Co.
New board Chairman Michael Sweeney said Monday was “the first day of a new beginning” as the 142-year-old newspaper got “a new lease on our future.”
In a note to readers, Sweeney acknowledged challenges ahead in “finding new ways to finance the quality journalism that you have come to expect of us” as the industry makes a transition to the digital world.
Among other things, the Star Tribune is exploring charging readers for access to some or all stories on the Internet. Next month, it plans to launch a Minnesota Vikings premium package for $19.95 a year with photos, chat sessions and other football coverage not available on the free part of the Web site.
“Ultimately, you get to decide what information you want, how you want to receive it and at what price,” he wrote. “The debate about the future of newspapers is really a debate about what you, as readers, are willing to support.”
In choosing Sweeney as the new chairman in August, the new owners found someone with extensive experience in retailing, but not newspapers.
Sweeney is the managing partner of the private equity firm Goldner Hawn Johnson & Morrison Inc. in Minneapolis and previously served as president of Starbucks Coffee Company (UK) in London. He spent several years developing and selling franchise companies for Blockbuster Video and Papa John’s Pizza.
When his appointment to the Star Tribune board was announced, Sweeney told The Associated Press that he made a long-term commitment to be involved on the board. Sweeney did not immediately respond to interview requests Monday.
Senior lenders will now hold about 95 percent of stock in Star Tribune Holding Co., which is becoming Star Tribune Media Company LLC. under the new ownership.
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