Journal Register Co. Files for Bankruptcy
The Yardley-based publisher of several Bucks County newspapers has filed for bankruptcy for the second time in three years.
Based out of Yardley, the JRC publishes dozens of local daily and weekly newspapers and affiliated magazines and websites in 10 states.
Bucks County properties include weeklies The Advance of Newtown and the Perkasie News Herald, as well as BucksLocalNews.com. The company also publishes The Trentonian, The Reporter in Lansdale, and The Times Herald of Norristown.
The company filed voluntary petitions for Chapter 11 in U.S. Bankruptcy Court for the Southern District of New York and "will seek to implement a prompt sale," according to Digital First Media, which operates MediaNews Group and Digital First Ventures.
The auction and sale is expected to take 90 days, according to a Digital First Media press release. JRC will continue normal business operation during the sale process, the company said.
Digital First reportedly has signed a bid for JRC from 21st CMH Acquisition Co., an affiliate of Alden Global Capital, the hedge fund that runs Digital First Media.
According to a blog post written by John Paton, CEO of Digital First Media, JRC exited bankruptcy in 2009 with $225 million in debt, but was able to grow its digital revenue by 235 percent over the past three years.
While overall revenue was up 32.5 percent, expenses were down 9.7 percent compared to 2009, Paton wrote. Digital expenses were up 151 percent over the past three years, Paton wrote.
However, print advertising revenue dropped by 19 percent over the past three years. Print ad revenue is what makes a newspaper profitable, and represented half of JRC's revenues, according to Paton. Print circulation and circulation revenue also declined, he said.
Also impacting the bankruptcy filing were "leases, defined benefit pensions and other liabilities that are now unsustainable and threaten the company's efforts for a successful digital transformation," Paton wrote.
According to Paton:
"All of the digital initiatives and expense efforts are consistent with the Company’s Digital First strategy and while the Journal Register Company cannot afford to halt its investments in its digital future it can now no longer afford the legacy obligations incurred in the past."