Regional Daily Newspapers May Shut Down

NEW BRITAIN (AP) — The owner of two central Connecticut daily newspapers and 11 weeklies has told employees that the publications could shut down by January unless a buyer steps forward.

Troubled newspaper publisher Journal Register Co. told employees of The Herald of New Britain and The Bristol Press that the papers could close as early as January 12.

Edward Gunderson, the newspapers’ publisher, told staff in a memo November 10 that “in the event that there is no buyer, then we anticipate the facility will be shut down. ... You will not have the right to displace other employees.”

Mr Gunderson also sent an identical memo to employees at the 11 weekly papers in the Imprint Newspapers division of Journal Register.

It wasn’t immediately clear how many workers would be affected if the papers went out of business.

Mr Gunderson declined to comment Tuesday to The Associated Press. A call to Journal Register’s headquarters in Yardley, Penn., was not returned.

The Herald, which began publication in 1881, has a Monday–Saturday circulation of 8,940, while the Press, founded in 1871, has 8,047 Monday–Saturday subscribers, according to the Audit Bureau of Circulations.

A combined Sunday edition, The Herald Press, has a circulation of 19,016.

Problems at Journal Register, which owns 22 daily newspapers and about 300 nondaily publications nationwide, began mounting last year, when its shares began a steady decline and advertising revenues shrank.

The company’s shares, now about one cent apiece, were delisted from the New York Stock Exchange last spring. In April, Journal Register disclosed that it hired a financial adviser to consider a possible sale.

For the third quarter that ended September 28, Journal Register reported an $8.7 million loss, compared with a net income of $11.2 million in the same quarter last year. Total advertising revenue dropped 13 percent to $74.3 million in the quarter from the year-ago quarter.

The company has also been hindered by its bank debt, which totaled $646.3 million at the end of the third quarter. It says it has $85.6 million in assets and $729.7 million in liabilities.

Newspapers across the country have been dealing with trouble from reduced cash flow caused by advertising revenue dropping faster than anticipated this year. They were already coping with a large shift of readers and ad dollars to the Internet when the current worldwide financial downturn hit.

Journal Register’s other holdings in Connecticut include The New Haven Register, The Middletown Press, The Register Citizen of Torrington, 17 weekly newspapers, and Connecticut Magazine.