BJ publisher makes E&P blog

The Beacon Journal publisher today made headlines in one of the Editor & Publisher blogs which also used the famous BJ front page on the sale by McClatchy to Black Press Lfd. The blog called Fitz & Jen is written by editor at large Mark Fitzgerald in Chicago and associate editor Jennifer Saba in New York.


S&P Downgrades ‘Akron Beacon Journal’ Publisher Deeper Into Junk On Debt

Add Black Press Ltd. to the list of newspaper companies who are now hurting because they “won” in bidding for former Knight Ridder papers.

British Columbia-based Black Press -- no relation to imprisoned former Canadian newspaper mogul Conrad Black -- bought the Akron Beacon Journal in 2006 when The McClatchy Co. unloaded a dozen dailies after acquiring Knight Ridder.

Now Standard & Poor's Ratings Services is citing the debt taken on to swing that deal as part of reason it downgraded Black Press corporate credit rating to B from B+. The downgrading pushes the publisher deeper into junk territory.

S&P also took Black Press’ senior secured debt two notches down to B from 'BB-', and lowered its “recovery ratings” for the company and its subsidiary to 3 from 2. The higher number reflects S&P’s view that creditors can now expect to recover between 50% and 70% of their investment in the event of a payment default, down from the 70% to 90% recovery suggested by the 2 rating.

"The downgrade reflects our view of Black Press' weakened credit protection measures and reduced financial flexibility stemming from lower EBITDA and higher debt levels," Toronto-based S&P credit analyst Lori Harris said in a note.“Furthermore, we believe the impact of lower profitability and higher debt levels has resulted in the tightening of financial covenants. While management is taking steps to strengthen its operations and liquidity position, we believe that Black Press will remain challenged in fiscal 2010, largely because of difficult industry conditions.”

Black’s biggest problems are in the United States, with its Canadian community newspaper providing at least a temporary cushion against the industry weakness, S&P said.