Friday, May 1, 2009

The Columbian files chapter 11

From the Oregonian:

The newspaper industry's crash hit the Northwest again Friday when The Columbian Publishing Co. filed Chapter 11 bankruptcy.

Scott Campbell, the Columbian's third-generation publisher and co-owner, said an ill-timed foray into real estate and a 40 percent decline in ad revenue forced the move. Bank of America in April sued the Columbian to recover $15.4 million in unpaid debt and interest.

The Columbian will continue to publish daily, he added, and will emerge from bankruptcy intact and well-positioned. After cutting staff from 350 to 270 and paring other expenses, the company now has a positive cash flow, Campbell said.

At the root of the Columbian's problems was debt that it assumed to get a glossy new office tower built at 415 W. Sixth St. in Vancouver. The Columbian moved its operation to the new building in January 2008, which coincidentally is when its management realized that ad revenues were falling way short of projections.

Shortly thereafter, the Columbian moved its staff back to its old building at 701 W. Eighth St.

I wonder how much real estate ad revenue has dropped.