|OUT OF BANKRUPTCY
The 142-year-old Star Tribune has "a new lease on our future," says its board chairman, Michael Sweeney.
MINNEAPOLIS - The Star Tribune emerged from Chapter 11 bankruptcy protection yesterday with its main lenders becoming the new owners and its debt slashed by 80 percent.
Minnesota’s largest newspaper will now try to ride out an advertising drought and boost revenue, in print and online.
A bankruptcy judge in New York approved the reorganization plan Sept. 17. The newspaper had sought protection eight months earlier, saddled by debt from Avista Capital Partners’ 2007 purchase of the paper from McClatchy Co.
Yesterday, the 142-year-old newspaper got “a new lease on our future,’’ board chairman Michael Sweeney said.
The Star Tribune is exploring charging readers for access to some or all stories on the Internet. 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 website.
“Ultimately, you get to decide what information you want, how you want to receive it, and at what price,’’ Sweeney wrote. “The debate about the future of newspapers is really a debate about what you, as readers, are willing to support.’’
Sweeney, chosen as chairman in August, has extensive experience in retailing, but not in newspapers. He is managing partner of the private equity firm Goldner Hawn Johnson & Morrison Inc. and previously served as president of Starbucks Coffee Co. (UK) in London. He spent several years developing franchise companies for Blockbuster Video and Papa John’s Pizza.
Senior lenders will now hold about 95 percent of the stock in Star Tribune Holding Co., which is becoming Star Tribune Media Co. LLC.
The company’s debt was slashed to $100 million, from $480 million when it filed for Chapter 11 on Jan. 15.
The Star Tribune joins Journal Register Co. and American Community Newspapers, operator of three small daily papers in Minnesota and Texas, in emerging from bankruptcy protection.