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Media: GateHouse default likely, analyst says

From Editor & Publisher:

GateHouse Media is likely to default under its credit agreement unless it can negotiate an amendment to its covenants or get a cash injection from its largest stakeholder, Moody’s Investor Service says in a report downgrading the community newspaper publisher’s credit and probability of default ratings.

and

GateHouse could bump up against loan covenants, Moody’s added.

“Moody’s considers it highly questionable whether GateHouse will be able to comply with this covenant test over the near term without the benefit of proceeds from asset sales [emphasis mine] or another equity cure from its largest shareholder,” [Moody's Senior Analyst John] Page wrote.

In other words, GateHouse is going to have to sell of a big chunk of its assets (perhaps the Peoria Journal Star) or get more cash from Fortress Investment Group, a hedge fund that owns close to half of GateHouse.

GateHouse stock closed trading today at 75 cents a share, which is higher than its previous closing price of 72 cents a share. But the price did reach a brand-new all time low of 51 cents a share. Its previous low was 56, which happened yesterday.

UPDATE: I’m not the only blogger on a death watch.

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This entry was posted on Wednesday, July 30th, 2008 at 6:08 pm and is filed under On the Media. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

4 Responses to “Media: GateHouse default likely, analyst says”

  1. BJ Stone says:
    July 30, 2008 at 8:12 pm

    Billy, a couple of things:

    1. I can’t even log in to my own blog, and it doesn’t even recognize my own email address when I try to get a password. Any ideas? My old username/password combination is apparently toast.

    2. Gatehouse is not alone among Peoria media outlet owners who are suffering. You should spend some time reporting on radio stocks, too. Regent is RGCI. Not doing well.

    Thanks.

  2. Billy Dennis says:
    July 30, 2008 at 8:22 pm

    B.J.: Send me a email with your current email address. Thanks..

  3. Josh_B says:
    July 31, 2008 at 10:39 am

    BJ is right. And, from what I hear, the TV stations are feeling a massive crunch, too. Haven’t you noticed that the on-air talent is shooting video now? Even Lee Ranson had to go to a class to learn how to shoot and edit.

  4. The Peoria Chronicle » Blog Archive » GateHouse Media continues to spiral downward says:
    August 1, 2008 at 8:37 pm

    [...] of course, Billy Dennis has been outdoing himself in his coverage, even getting an interview with analyst Lauren Rich [...]