On Jan. 31, my paycheck from HSU for the first time went straight into my checking account at Bank of America through direct deposit. After I finish this column, I will transfer much of it today to my Bank of America mortgage through electronic bill paying. I need to say that in the interest of full disclosure, because this column is about B of A, at least in so far as the company now publishes the Times-Standard.
Well, that's my take of last month's news that MediaNews Group of Denver, previously owned by William Dean Singleton, filed for bankruptcy protection and restructured some $930 million in debt. According to the Wall Street Journal, a newspaper owned by Rupert Murdoch, MediaNews was valued at just about $200 million. In other words Singleton found himself in the same situation as many homeowners these days -- trying to keep the bank from evicting it out of a house now worth just a fraction of what it was worth when he signed the refi papers. Really, the same situation: The Denver Daily News reported that MediaNews lawyers filed a brief begging the bankruptcy judge to force the phone company to keep the phone lines of the MediaNews-owned Denver Post working through the length of the restructuring. Reporters have enough trouble getting sources to call them back on phone lines that work.
To keep the business open, Singleton handed over a large chunk of ownership to the debt holders, led by Bank of America, to bring the debt down to about $179 million. And he gave the banks three of seven seats on the board of directors. Huffington Post reporter Catherine Tsai noted that newspaper bankruptcies are resulting in the transfer of ownership to banks at dozens of newspapers across the country, including the Los Angeles Times, the Chicago Tribune and the Philadelphia Inquirer.
News of the bankruptcy ran in the Times-Standard, in an un-bylined piece which came off the Associated Press Wire Services. As an aside, Singleton runs the AP as its chairman. And though I looked hard, the story in the Times-Standard did not carry that information, nor the disclosure that MediaNews owns the Times-Standard.
As AP Chairman, Singleton gave a speech to newspaper publishers back in April. He told them that he was "mad as hell" at Google and other poachers who take newspaper content without paying for it and he was now ready to fight them for it.
Now, for some time, I've been nervous about Google's power in the information world. It sits on $12 billion in cash and made $2 billion in profit in the third quarter of last year alone. If it wanted to, it could buy Singleton's chain of 54 newspapers out of petty cash. A slight change to the algorithm it uses to find me stories in my search of "MediaNews" and "Singleton" and "bankruptcy" could push the useful stories from the first page of listings to the last.
But with B of A now having three seats on the board of one of the country's largest newspaper chains, one that owns a huge number of California's daily and community papers --from the Willits News to the Los Angeles Daily News -- and with so many newspapers in bankruptcy, I now shift my fear.
Because at least these days, what industry is most in need of good publicity? Here's a hint: The Wall Street Journal reported Sunday that at the World Economic Forum in Davos, Switzerland, last week, the unofficial theme was "kill all the bankers." Out of curiosity, how much have you read or heard about the goings on at Davos, one of the single most important world events, considering that much of the world still teeters on the brink of financial collapse?
In good times for journalists, reporters avoid jobs at news organizations known for sacred cows -- those are stories off limits because of personal ties the publisher (or publisher's spouse) has to the person or organization the story is about. These aren't good times and reporters don't have that luxury. When you already survived two rounds of layoffs and know there will be more to come, you become careful about the stories you pitch, especially if you need that paycheck to pay your mortgage.
This is how circular the media-financial complex is. Bank of America runs an ad in the Times-Standard. When it pays the bill for the ad, the money spirals up to MediaNews in Denver, which applies some of it to the debt it still owes Bank of America. Some of it goes to paying operating expenses, a tiny portion of which is the salaries of the 8,700 people who work for MediaNews which gets back to Bank of America through direct deposit, which almost immediately, through electronic bill paying, is transferred to B of A mortgages or B of A Visa cards. Some of the operating expense money goes straight to Singleton, because under the bankruptcy reorganization he will be paid more than $600,000 in salary and up to $500,000 in bonus for being chairman and doing such a great job of running the company. If he pleases his board, he might do better. The board of directors at B of A just awarded its CEO, Brian Moynihan, a nice 19 percent raise in salary to $950,000.
If I were Singleton, I'd take that pay packet and invest it in B of A stock. It's already risen about 500 percent over the past year, according to Google Finance. If he does, and the stock continues to do that well, he might end up his own boss.
Marcy Burstiner is an assistant professor of journalism and mass communication at Humboldt State University. She recently took a 10 percent cut in her salary through forced furloughs and word is she might have to eat that cut next year without the days off. Watch for next month's column when she tells you how great a job Arnold Schwarzenegger is doing as governor.