Layoffs in Houston today

Many of us have friends there so I'm posting here.

Layoffs have begun today at the Houston Chronicle. Incredibly, it will
take them two days to do it.
The Houston Press is blogging about it.
http://blogs.houstonpress.com/hairballs/2009/03/at_the_chron_where_you_going_w.php

About AH Belo and EBITDA

A commenter has posted this and I thought it needed it's own posting.
Is this person correct? Read for yourself:

While I am not an expert in corporate finance, I am concerned about AHBelo's cash flow and its loan obligations to its lenders.

The information I am going to refer to is in the company's annualreport (10-k report), available on the web at http://phx.corporate-ir.net/phoenix.zhtml?c=219524&p=irol-sec

Here is a summary of that it says regarding its credit arrangements with the banks:

-- On February 4, 2008, the Company entered into a $100 million credit agreement with JP Morgan Chase Bank, J.P. Morgan Securities, Banc of America Securities and Bank of America. At that time the company had no debt.
-- As of September 30, 2008, the Company was not in compliance with the credit agreement. The company has used $10 million of its line of credit.
-- During the fourth quarter of 2008, the Company's bank group approved an amendment credit agreement. (In part reducing the line of credit to $50 million.)
-- On January 30, 2009, the Company amended its credit agreement again. Among other matters, the amended credit document creates a line of credit secured by the Company's accounts receivable, inventory, real property and other assets; and sets earning benchmarks that the company must meet.

Under the credit agreement the Company must meet the minimum adjusted EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) as outlined below:

For the six months ended March 31, 2009: -$4,000,000 (a negative number)

For the nine months ended June 30, 2009: $6,500,000

For the 12 months ended September 30, 2009: $15,000,000

For the 12 months ended December 31, 2009: $22,500,000

The key question is whether the company and meet these benchmarks. If it doesn't, several things could occur:
-- AH Belo renegotiates its credit agreement
-- The banks foreclose on AH Belo's property
-- The company goes into bankruptcy

My question: How realistic is it that AHBelo will meet any of those goals? Do we hit the wall at the end of the month?

Hoping for this RIF to pass over?

A religiously aware reader points out that the Jewish holiday of Passover starts sundown Wednesday April 8, which may or may not be around the time the layoffs happen. Our reader directs us to the book of Exodus for how the Hebrews managed their escape:

12:22 And ye shall take a bunch of hyssop, and dip it in the blood that is in the bason, and strike the lintel and the two side posts with the blood that is in the bason; and none of you shall go out at the door of his house until the morning.

12:23 For the LORD will pass through to smite the Egyptians; and when he seeth the blood upon the lintel, and on the two side posts, the LORD will pass over the door, and will not suffer the destroyer to come in unto your houses to smite you.

Dallas job opportunity

A former DMN-er and a friend to many of us, Steve Kenny, sends us this:

This just moved Friday on the Northwestern University group at LinkedIn, and I thought it might be worth posting. It's from Robert R. Frump, editorial director of Clark Consulting.


I'm looking for two senior financial writers with editorial and promotional and DM, plus web writing skills. Dallas area location. ABout 10 -12 years career experience preferred.

http://www.clarkconsulting.futurestep.com/Opportunities

A note to DMN staffers who are not in the newsroom departments

A comment to an earlier post noted that the newsroom is not the only department facing cuts. The limited scope of this blog intends no slight to those other departments. It's all I can do to try to get information on the editorial operation. If someone from another department wants to set up a blog, send me an e-mail and I'll be pleased to share what I think I know about how one should do this. The technology is simple. But there are issues to be aware of.

A limited defense of management

In comments and a couple of e-mails, people are blaming the Belo bosses for where we are at. One reader writes that management actions in the past few years had been like boring holes in the bottom of a leaky boat to let the water out. We still remember CueCat.

But if our problems were mainly management, wouldn't better managed papers be in better shape? Are there any examples of that out there?

Luminant is looking for a "communications specialist"

I got an e-mail from the Luminant corporate communications office asking that I pass this new job posting along for a Communications Specialist. The description of the job includes:

The ideal candidate for this position will have a strong background in all facets of internal and external corporate communications. A strong knowledge and experience with Web-based channels (both internet and intranet) and implementing digital initiatives is required.

Responsible for generating all content to engage a diverse and diffuse workforce, creating new and sustainable internal and online communications vehicles that may not currently exist. Position requires strong writing skills and the ability to seek and uncover new, creative story ideas. The candidate will also be tasked with enhancing and maintaining the company’s intranet and external Web site.

It's a Dallas job. Apply online.

What we learned today -- not a lot

George Rodrigue answered questions for an hour during an informal lunchtime conversation. I'm told there was very little new news. Readers say he did make a few points:

1) A list of proposed RIFs is now in the hands of HR and the corporate lawyers. If the list is approved the process will complete quickly. How long will the review take? George would not say. When will the RIFs happen. A week or two into next month seems to be a reasonable bet. But if there are legal reasons to change the list, or if financial news gets so much worse that more are needed, that could delay things.

2) How many will lose their jobs in the news operation? George refused to give any estimate and said the final number has not been set. But he did say that the number now being reviewed is significant. It is the third "official" number. The first demand from corporate was reduced after evaluation of what it would mean to the content in the newspaper. Then after the unexpectedly bad financial numbers from the first couple of months of this year came in, the number went back up.

3) The real estate reshuffling among Belo properties seems most related to the people now in rental space in the Founders Square building. Company wants to end that ASAP, so there will be reshuffling in the buildings we own and where there is space. See comments on earlier posts for some other suggestions about what is happening.

4) About the future shape of Local News. There will be fewer fulltime editors. There will be what George called "team leaders" who will do some writing and some editing. Some will be current editors asked to take on writing. Some will be current writers asked to take on editing. Projects reporters will be deployed sometimes to work with community reporters on relatively fast-turnaround stories.

5) The real controllers of AH Belo at this point appear to be the banks that loaned the company money last year. The banks set quarterly cash flow goals that, if we miss them, the banks can literally own us. George says the details are available online in SEC filings. I've heard that the first goal, set for March 31, looks hard to attain. But I'm not good enough at reading that material to offer an opinion. I'm sure there are others out there who can do better. Please comment or send me an e-mail.

In general, there seemed to be a general sense of appreciation that George had put himself forward to take questions, along with frustration that there were not more or better answers.

If I've missed any headlines, the comments are on.

Anonymous comments now enabled

Lots of settings in that settings panel. I hadn't noticed the Comments choices. If anyone had wanted to comment but didn't want to create a new gmail account to preserve anonymity, I've fixed that. But I will enforce the ironclad rule about personal attacks. Do not.

More details about the restructuring of Local news: Back to the future

Editors had a meeting this afternoon. Some details are filtering out. The plans sound more ambitious than scaled back. The idea is to better serve the "core readers" in those communities where we have the most of them. That means other communities will get less attention: NE Tarrant and the southern Dallas suburbs in particular.

What will the identified communities get? Small teams of reporters. A government reporter and a schools reporter, maybe. But there will still be GA reporters. There will also be an emphasis on analysis and context stories. Maybe some cuts in specialties, though there aren't many of those positions left.

One of my readers said the plans made him think of the scene in the movie Apollo 13 where the astronauts need to power up the command module but only have enough battery power for a couple of light bulbs. Getting it to work took very careful planning. How to "power up" local coverage while cutting the editorial staff will take very careful planning.