A formal bidding process seeking bidders interesting in buying the cross-border publishing empire built over several decades by David Black of Victoria, Canada, is now underway. The company reported owns about 144 newspapers in the U.S. and Canada.
The financial woes of the company only became fully known after dual court filings in Vancouver and Delaware seeking to stave off creditors in the U.S. and Canada while Black Press sought a buyer.
Two articles published within the past several days have taken close looks at the current status the bankruptcy and auction of Black Press, the Canadian-based owner of the Honolulu Star-Advertiser, MidWeek, and daily newspapers on Kauai and Hawaii Island.
Jim Simon, who will be familiar to many for his stint as managing editor at Civil Beat, teamed up with retired reporter Chuck Taylor for a story on Friday featured at Post Alley, a news site by a Seattle writers’ collective (“Major shakeup in Washington State and Hawaii journalism”.
Then todayTyler Olsen, publisher of the tiny Fraser Valley Current in British Columbia, added another in-depth story (“Black Press auction stalking horse”).
As Taylor and Simon put it:
According to court documents, as of a few weeks ago, Black Press had only about $3 million (Canadian) cash on hand, with $61 million of principal and accrued interest outstanding. The court-approved creditor protection in Canada is not called a bankruptcy, but it definitely quacks like a bankruptcy.
They pointed to long-running rumors about attempts to sell the Star-Advertiser
The Star-Advertiser has struggled for years and suffered several rounds of layoffs. According to the Pacific Media Workers Guild, roughly 40 union members remain at the paper, compared to about 65 in 2020. Kevin Knodell, a Star-Advertiser reporter who is the guild’s unit chair, said the company laid off four newsroom workers just days before the announcement of creditor protection.
Olsen’s overview sets the stage, but you’ll go to his story for the nuts-and-bolts financial details, which are not pretty.
Having realized last summer that its debt load was too heavy to manage, Black Press hired a US company to try to offload some of its properties, according to a report by the monitor of the ongoing creditor protection process.
That company, Dirks, Van Essen & April (DVA), is considered “the leading merger and acquisition firm in the US newspaper industry,” the documents say. Over the last three decades, the company has been involved in the majority of newspaper transactions.
At first, Black Press told DVA to try to find a buyer for its Hawaii newspapers, including its one big US daily—the Honolulu Star-Advertiser.
“It was hoped that the sale of BP Hawaii’s business would generate sufficient cash to allow for a significant payment toward the Companies’ existing creditors,” the documents say.
But although the Hawaii operations were profitable, the potential purchase price was lower than Black Press had hoped. Four days after DVA started shopping the Hawaii papers, the firm was instructed to turn its attention to finding a buyer for the company’s Washington State community papers. And four days after that—having received no better news—Black Press finally told DVA to see what its Canadian papers might fetch.
During the process, 52 potential buyers were contacted. Five made offers “for various combinations” of Black Press’s three entities. None were good enough to forestall creditor protection.
[Revised 7 a.m. Hawaii Standard time]
