CSBJ Daily

Bloomberg News reported today that several national newspaper chains, including Denver-based Media News Group, which publishes the Denver Post, may be close to default on “billions of dollars” of debt.

Bloomberg noted that newspapers are selling today for about six times earnings. This is below the 11.5 times earnings that MediaNews and Hearst Corp. paid in a $1 billion deal for the Mercury News and three other newspapers during 2006. Since then, Media News has seen the ratings on its senior unsubordinated debt cut by four levels, to B-.

The industry’s woes are attributable to a buying spree between 2000 and 2007, when companies spent more than $50 billion to acquire small chains and stand-alone dailies and to an industry-wide collapse in advertising revenue, which fell 6.8 percent during the period.