Why Singleton will stay after bankruptcy
In the latest act of a long and resilient career, Singleton is scheduled to continue as the chief executive of the company after it is reorganized under a prepackaged bankruptcy filed today.
How does he get to keep his job after losing all that money? The same way the real Evel Knievel got to keep his.
No matter how badly the late daredevil was mangled in numerous wrecks – he is said to have established a world record for breaking the most bones in one incident (35) – Knievel always got back on his motorcycle as soon as he could, eagerly embracing the danger of jumping over alligator pits and yawning canyons.
Risking life and limb was just another day at the office for Knievel, who succumbed rather prosaically to a host of medical problems at the age of 69 in 2007.
The 58-year-old Singleton has pretty much emulated Evel’s derring-do since he used someone else’s money to buy his first paper in Texas at the age of 21. (He has been using other people’s money ever after, too, which is why he isn’t losing a nickel of his own cash in the upcoming bankruptcy.)
Sometimes, Singleton’s bravado achieved great success, as he did in purchasing the Denver Post from Times Mirror at a distressed price in 1987. The paper today dominates the market after the shutdown of the Rocky Mountain News, its partner in a joint-operating agreement. He also deserves credit for rescuing the struggling Oakland (CA) Tribune from what almost certainly would have been an ignominious fate.
But other Singleton acquisitions, like the Houston Post and Fort Worth Press, ended in write-offs, as will be the case in the bankruptcy filed today.
In the planned reorganization of Affiliated Media under Chapter 11, lenders will lose three-quarters of a billion dollars and the Hearst Corp. will lose $317 million in equity it had invested with Singleton. While the prepackaged bankruptcy plan calls for lenders to own 80% of the going-forward concern, Singleton and other key managers will own a 20% stake in the business.
Why would the creditors keep the guy who lost all that money?
Because he is the best chance they have of extricating any value from the business.
The lenders understand that the newspaper industry is in a period of irreversible contraction, as consumers and advertisers alike increasingly migrate to the digital media.
But the lenders also know newspapers are major and valuable brands, attracting the largest proportions of advertising dollars spent in each of the communities they serve. That is to say: Even though they used to be bigger, newspapers remain big businesses.
The trick in wresting future value from the MediaNews properties (and all other newspapers, for that matter) is to find a new, sustainable business model to ensure their long-term viability and profitability.
Singleton not only knows and loves newspapers, but he also is uniquely un-squeamish among publishers in doing whatever it takes to make a publication profitable.
In his pursuit of finding sustainability for newspapers, nothing is sacred to Singleton. If he can merge production or circulation operations, he will. If he can consolidate newsrooms or ad sales, he will. If it is cheaper to outsource customer service or ad make-up, he will.
He has done it before and, if the opportunity presents itself, he will do it again.
No other senior newspaper executive is as daring and seemingly impervious to pain as Dean Singleton.
That’s why he’ll climb out of this wreck, saddle up and start all over again.