Impending doom

From today's NY Times: The Journal Register has hired Lazard as an adviser as it weighs a restructuring.

If the company were to seek bankruptcy protection, as analysts said was possible, it would be a first in recent memory for a publicly traded newspaper company, John Morton, a longtime newspaper analyst, said.

Two tidbits I find most interesting:

• The company, according to the Times, is carrying $625 million in debt. Not good when the economy is slipping and newspapers are no longer the medium of choice for advertisers.
• Four years ago the company spent $415 million on several Michigan dailies. And we all know how the car industry is doing these days.

Talk about the perfect storm: a recession, heavy debt load, a bad acquisition and, oh by the way, a sector that is fast in decline.

Update (4/12): I just came across this interesting perspective from Louis Hau at Forbes.com. He points out that newspapers, if run properly, can be quite profitable. The problem is when they're saddled with debt or a recession hits. (Click here for full article.)