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Avista Already Struggling With Star Tribune Acquisition
The Wall Street Journal reported today that investors who bought loans backing Avista’s acquisition of the Minneapolis Star Tribune were recently informed that the Star Tribune’s cash flow is 20% lower than what Avista had projected in their financial models prior to the buyout. This type of news is never a good sign, but given the fact that the deal took place only 3 months ago, it’s about as alarming as one could imagine. The paper has already made a series of layoffs in the past few months, trimming where it feels it can safely cut costs, but it appears as if more drastic cuts are imminent.Â The negative reinforcing cycle seems to actually be accelerating, andÂ perhaps Glenn Harlan Reynolds is the next Nostradamus.
[tags]Wall Street Journal, Avista Capital Management, Minneapolis Star Tribune, Death of the Dailies, Decline of Daily Newspapers, Between A Rock And A Hard Place, Letters You Don’t Want To Receive[/tags]