Monthly Archives: September 2017

Star-Advertiser staff cuts follow lower earnings by parent company

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The Honolulu Star-Advertiser, the state’s largest newspaper, abruptly terminated ten newsroom staff on Friday, according to a report from Civil Beat.

The latest cuts followed an earlier round about a year ago that resulted in a lost of 15 positions. Overall, the newspaper has cut its editorial staff nearly 25% in about a year, falling from 110 to 85.

The newspaper has not provided the union representing newsroom works with details of the financial pressures behind the cuts, according to Civil Beat.

Oahu Publications, which publishes the Star-Advertiser and Midweek, along with other specialized newspapers, is owned by privately-owned Black Press, Ltd., controlled by Canadian publisher David Black.

Black, now 71, bought his first newspaper in 1975, and now controls about 120 community newspapers, most in British Columbia and Washington, but including daily newspapers in Honolulu and Akron, Ohio.

As a private company, Black Press is not required to publicly report its financial results. However, the Torstar Corporation, publisher of the Toronto Star, owns a 19% stake in Black’s company and does report profit and loss from this investment.

Torstar reported its latest quarterly results in July, including a small loss from its associated investments, including Black Press.

It reported a loss of $2 million from Black Press in the second quarter of 2017, compared to a profit of $1.7 million in the same period of 2016. Projecting from Torstar’s 19% stake would indicate the full Black Press loss at over $10 million for the quarter.

Loss from associated businesses

Our loss from associated businesses was $0.3 million in the second quarter of 2017 compared to a loss of $16.0 million in the second quarter of 2016.

The loss in the second quarter of 2017 included income of $1.9 million from Blue Ant and income of $1.1 million from our investment in Nest Wealth offset by a loss of $2.0 million from Black Press and a loss of $1.2 million from VerticalScope. The loss from VerticalScope included $6.3 million of amortization expense. The loss in the second quarter of 2016 included income of $1.7 million from Black Press and income of $0.3 million from Blue Ant, offset by a loss of $17.9 million from VerticalScope which included $26.6 million of amortization expense.

The rating agency S&P Global downgraded Black Press’ outstanding debt earlier this year, but rated the company as “stable,” according to a release from S&P.

The downgrade reflects our expectation that Black Press’ revenues and EBITDA will remain pressured following weak advertising revenues reflecting economic weakness in some operating regions along with a relatively fixed cost structure and limited ability to further reduce expenses. We forecast that weaker EBITDA, about 10%-15% lower than current levels, will lead to adjusted debt leverage in the mid-to-high 4x area in fiscal 2018 (ending Feb. 28, 2018), compared with our previous assumption of below 4x. The company exited first-quarter fiscal 2018 with debt to last 12 months EBITDA of about 4.5x due to lower revenues and an inflexible cost structure. As a result, EBITDA margins will likely decline by 100 basis points from the previous year to about 15% in fiscal 2018, leading to lower cash flow generation than previously expected. However, in spite our expectation of deteriorating EBITDA, we believe scheduled annual debt repayment will offset any material deterioration in credit metrics from current levels.

S&P also noted that Black Press has debt maturing in June and December 2018. Any difficulties in refinancing this debt could prompt another reappraisal of the company’s credit rating, S&P reported.

I hope one of the accountants out there will take a couple of minutes to explain all of that in plain English for the rest of us.

The joy of fresh cut grass

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First there was the obvious joy that Marlo, one of our favorite early morning dogs, felt diving into the fresh cut grass this morning. This appeared to be some kind of dog nirvana! I’ve tried to capture the feeling in just a few photos (click below to see the all).

Later, I tried looked up “fresh cut grass.” What I found wasn’t so much fun, unfortunately. Is it reliable? I don’t know. Can I explain it to Marlo? Not at all likely. Does it mean we shouldn’t mow the grass? I think that’s a big negative, too. So why bring it up? Well, I was curious about it, and figure some of you might be as well.

But do enjoy the photos of Marlo as he revels in the smell and feel of the grass.

Fresh Cut Grass

Saying goodbye to another generation this morning

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I’ve got a couple of cousins and their spouses in town this weekend (from Portland and Colorado Springs) to scatter their dad’s ashes at sea. I think he was the last of his generation of our family.

Well, actually, we are 2nd cousins, but since we’ve all gotten to know each other, it feels like just cousins. We’ll be on the boat just a little later this morning, and we end the day here at our place for dinner. In between, perhaps, some mid-day libations. Then they head off for a week or so in Kona. So I won’t be posting anything more substantive until tomorrow.

In the meantime, ponder this story published a few years ago by the Atlantic: “These Journalists Spent Two Years and $750,000 Covering One Story.”

They used Pro Publica’s [“infestation”?? What insane auto correct put that there??] investigation of Tylenol as an example of the kind of in-depth journalism that is struggling to find a firm financial base for the future. Of course, few investigative reporters ever get to work on stories of that breadth, complexity, and duration, but it helps make the point.

And earlier this year, Bill Moyers listed out ten of the top sources of investigative reporting worth bookmarking.

Lots of good reading to be found there.

How to support hurricane relief

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It isn’t necessarily easy to know how to effectively contribute to relief efforts to aid those impacted by the series of recent hurricanes, Harvey, Irma, and Jose.

As usual, the Red Cross was out in front with their very public fundraising efforts, including a simple text to contribute $10. But many are wary of the organization after its actions in Haiti several years ago came under scrutiny.

This series of tweets from Pro Publica traces their prior in-depth reporting on Red Cross relief efforts.

A recent article in the Washington Post reviewed the Red Cross controversy and alternatives (“People are urging donations for Harvey relief efforts — just not to the Red Cross“).

The New York Times recently wrote about how to donate to victims of Hurricane Harvey (“Where to Donate to Harvey Victims (and How to Avoid Scams)“).

The Caribbean Disaster Emergency Management Agency (CDEMA) is soliciting donations.

CDEMA presently comprises eighteen (18) Participating States (PS): Anguilla, Antigua and Barbuda, Commonwealth of the Bahamas, Barbados, Belize, Commonwealth of Dominica, Grenada, Republic of Guyana, Haiti, Jamaica, Montserrat, St. Kitts & Nevis, Saint Lucia, St. Vincent & the Grenadines, Suriname, Republic of Trinidad & Tobago, Turks & Caicos Islands and the Virgin Islands.

Former Honolulu resident Lora Williams Helmer, now living in Oregon, is asking her friends to donate to ShelterBox, which provides aid kits in disaster areas with tents, rebuilding tools, and items such as solar lights, blankets, etc.

To donate, go to Shelterboxusa.org. Lora asks that you please designate Rotary D5100 and her when making your donation.

Obviously, there are likely many other ways to donate to disaster relief. Please share information on your favored relief agency.