MANHATTAN (CN) – The Minneapolis Star Tribune newspaper filed for Chapter 11 bankruptcy protection Thursday, listing $660 million in debts, less than two years after it was sold to a private equity firm for $530. The filing came a week after the newspaper and the Newspaper Guild called off contract talks – the Guild refused to accept $20 million in immediate cuts.
Star Tribune Holdings Corp. also filed for bankruptcy.
Avista Capital Partners bought the Star Tribune from McClatchy for $530 million in 2007. Cowles Media owned the newspaper for 60 years before selling it to McClatchy for $1.4 billion in 1998.
The Star Tribune cut its budget by $50 million since it went private, through layoffs, buyouts and attrition, according to media reports.
The Newspaper Guild told Minneapolis media that it has lost 100 jobs since Avista bought the newspaper – nearly 25 percent of the Star Tribune news staff. Twenty-three reporters and editors took buyouts last week.
It’s the latest blow to the staggering U.S. newspaper industry. Tribune Co. filed for bankruptcy in December, less than a year after real estate mogul Sam Zell bought it and loaded the company with debt, which he used to buy it.
This week Gannett, the publisher of USA Today, asked most of its employees to take one-week unpaid leave, and the Seattle Times asked many of its workers to do the same.