Jumat, 07 September 2012

Nieman Journalism Lab

Nieman Journalism Lab

What we know now: Reevaluating the 2009 Knight News Challenge

Posted: 06 Sep 2012 03:47 PM PDT

It’s been six years since the Knight Foundation launched the Knight News Challenge. It’s very different today than it was then, and the foundation’s been good about retracing its steps along the way and seeing what worked and what didn’t.

Today they released a report card of sorts, looking specifically at the 2009 class of News Challenge winners. That was the class that included projects like DocumentCloud, Ushahidi, MediaBugs, and Councilpedia. (It was also the first News Challenge class we covered here at Nieman Lab, if you want to see how we wrote about them back then.) The 41-page report, prepared by Arabella Advisors, looks at each of the projects, how they were implemented, and what lessons were learned in the process. (You can read the whole report here.)

Of the nine 2009 winners, the ones the report rates most highly are DocumentCloud, the Jefferson Institute’s Data Visualization tools, and Ushahidi. It rates Mobile Media Toolkit as just one tier down, at a level Knight calls “Maintaining” (“projects are active at a level consistent with the original scope of their News Challenge project”). One other winner, Virtual Street Corners, was always intended to have a limited lifespan.

But the other four didn’t work out quite as well, having declined in activity level or closed up shop altogether. CMS Upload Utility, Councilpedia, and MediaBugs have all moved into “Active at a lower level” status, Knight says (“the level of use has decreased and is limited compared with the original scope of their project”). And one, City Circles (née The Daily Phoenix), didn’t get very far at all (“projects are no longer actively being worked on, and faltered as a result of design flaws or implementation and adoption challenges”).

Michael Maness, Knight’s vice president for journalism and media innovation, told me Thursday that the review of past work was part of the process of improving the foundation’s efforts to fund innovation. (Knight did a similar review of the 2007 and 2008 winners.) “The nice thing with the News Challenge is that it’s almost a laboratory for ourselves,” he said.

Build code, build a following

The News Challenge asks that projects not just use open source tools, but also release the software they create to the public. Of the 2009 winners, DocumentCloud, Ushahidi, and Data Visualization stood out for how widely their code has been embraced. In particular, the report says those projects found favor because they persistently released updates rather than waiting for a finished product. They also released code that could be used outside of their specific app. On DocumentCloud, the report says:

The organization made a conscious decision at the start of the project that it would release its source code in smaller, usable modules along the way to full product completion, rather than as one set of code released at the end of the product development cycle. To date, in addition to the main DocumentCloud application, eight standalone components have been released to the public.

The report also finds that projects fared better if they had institutional support to draw on, either internal or external. The Data Visualization project, which is based at the Jefferson Institute, received additional funding from places like the Open Society Foundation and the Rockefeller Brothers Fund. The Mobile Media Toolkit, received money from the U.S. Agency for International Development to create a version of its mobile reporting tool set for media in developing countries. Last year, DocumentCloud found a permanent home at Investigative Reporters and Editors, and it had initial backing from The New York Times and ProPublica. As the report put it: “Winning projects that were hosted within an existing institutional base were often able to more easily draw on the mix of talent and resources they needed to seed and grow their ideas without incurring significant costs.”

When a project stumbles

One of the strengths of DocumentCloud and Ushahidi was a clearly identified goal that sought to address specific problems, whether that was organizing and annotating documents or the need for a tool that lets citizens collect and map information with SMS or Twitter. The report notes that some projects faltered because they didn’t have a clear goal or specific audience in mind. CityCircles, which initially planned to develop a website providing news for commuters on the Phoenix light rail system, later retooled to develop a mobile app. The original site failed to gain significant traffic, according to the Knight report, which prompted the team to try the app approach. But it was too late:

While the project tried to be nimble and adapt to the changing tech landscape by launching its own mobile app in July, it had already exhausted most of its budget and resources in developing its web version, which left little room for mobile app development and marketing.

Where some projects were embraced by media organizations, others faced resistance that would ultimately starve their efforts. Knight awarded $335,000 to MediaBugs, a tool designed to supplement news sites correction reporting by allowing the public to document errors, using software’s bug reporting tools as a model. Despite catching some high-profile errors, the project never caught on. As the report notes: “To date MediaBugs has struggled to gain traction among news organizations with limited adoption of its error correcting service. As of March 2012, 162 bugs had been filed on the site, at an average of seven a month.”

Scott Rosenberg, the creator of the project, told me he knew getting newsrooms to sign off on MediaBugs would be their biggest hurdle. “I assumed from the very beginning, from the application for the grant, that this would be a tough problem,” he said. “I had no illusions this would be a piece of cake, that we would release the thing into the wild and editors would adopt it.”

Many news outlets pointed to the fact they already had error reporting processes, while others said improving corrections was not their top priority. “We were trying to make the case this was an urgent issue and the urgency was not embraced,” he said. “It wasn’t embraced by news leaders and editors, who, in fairness, have a lot of problems they are dealing with right now.”

Still, Rosenberg said he thinks the MediaBugs approach is viable, particularly because the new guard of web-native media companies are more open to transparency and engaging with readership. “It’s not a technical problem,” he said. “It’s a social issue of whether journalism and news organizations are willing to open up a process they are more comfortable to leave closed.”

Lessons for Knight

The report doesn’t spare Knight when it comes to providing lessons on the News Challenge process. Specifically, News Challenge winners said they wanted more communication from Knight, as well as better assistance in areas like marketing and networking with others who could help projects succeed. Maness said they know from past contests that some winners need more help ramping up their project, whether it’s bringing on additional staff or developing a sustainable business model. If a News Challenge winner spends six months to a year struggling with those issues, it will likely set back their project, he said.

Going forward, Maness said, Knight plans to be more clear about the help it can provide for projects and the network of resources winners have at their fingertips. “We recognize the model we have needs to be more consultative, and should give a greater scope of support than just financial,” he said.

Full disclosure: The Knight Foundation is a past funder of the Nieman Journalism Lab, although not through the Knight News Challenge.

How Journal Register’s bankruptcy might affect the revival of the New Haven Register

Posted: 06 Sep 2012 12:00 PM PDT

In the spring of 2009, when I began researching what would become a book about online community journalism, I couldn’t have found a better foil than the New Haven Register.

Owned by the bankrupt Journal Register Co. (JRC), the daily was moribund and mediocre, its disconnect from the community symbolized by its location: a gigantic converted shirt factory, partly surrounded by barbed wire, on the outskirts of the city next to Interstate 95. The contrast with the New Haven Independent, a nonprofit, online-only startup that is the focus of my book, couldn’t have been more stark.

Three years later, when I turned in my manuscript, things had changed considerably. JRC was out of bankruptcy. Its chief executive, John Paton, was winning industry plaudits for his “Digital First” strategy of accelerating the transformation from print to online. The New Haven Register had a new, young, progressive editor, Matt DeRienzo. And DeRienzo had outsourced printing to the Hartford Courant and had begun preparing to move his staff to a yet-to-be-determined location in the downtown. New Haven, a poor, largely minority city of about 130,000 people, was suddenly home to two of the country’s most closely watched experiments in reinventing local journalism.

So I was shocked on Wednesday when Jim Romenesko reported that JRC was once again entering bankruptcy. As Paton explained it on his blog, the idea is to get the company out from under the legacy costs that it took on when the newspaper business was a lot larger and more profitable than it is today: debt; long-term leases on buildings it no longer needs; and pension obligations. The strategy is to take advantage of Chapter 11 in order to reduce JRC’s cost structure and re-emerge from bankruptcy in a matter of months.

The pension piece has been the subject of considerable consternation on Twitter and elsewhere, as it raised the specter of out-of-state investors (JRC is headquartered in suburban Philadelphia) taking away from loyal employees what is rightfully theirs. DeRienzo countered by pointing out that pensions are guaranteed by the federal government. “No one’s retirement is at risk,” he wrote.

There’s no question that guaranteed pensions are largely a thing of the past in the private sector, with defined benefits having given way some years ago to the era of the 401(k). And JRC is not the only newspaper company with pension problems. In 2009, The New York Times Co. nearly reached a deal to sell The Boston Globe that would reportedly have brought in less cash ($35 million) than the Globe’s future pension obligations ($59 million), which prospective buyers were asked to assume.

In other words, if you were going to start any private enterprise from scratch, you would almost certainly not include pensions as one of the benefits that you would offer your employees. And I have little trouble believing that JRC’s pension system is weighing the company down.

On the other hand, it seems to me that JRC may soon face a “Where’s the beef?” moment. Paton’s tireless advocacy of Digital First has gotten a lot of attention and praise — deservedly so. At some point, though, Paton has to deliver real improvements both to the journalism of JRC’s news organizations and to the bottom line.

I think Paton and DeRienzo have the right values and the right motives. I’m rooting for them. Fundamentally, though, we are talking about trying to effect change from the top down. Corporate chain ownership has been a disaster for community journalism. I’d rather my paper be owned by a good chain than a bad one. But neither is an adequate substitute for local ownership — and yes, I realize that’s no panacea, either.

As the Lab’s Joshua Benton points out, this may be Paton’s last, best chance to remake JRC exactly along the lines that he envisions — truly a new start without the dead weight of his predecessors’ poor decisions dragging him down. I’m eager to see what he’ll do with that opportunity.

Dan Kennedy is an assistant professor of journalism at Northeastern University and a panelist on Beat the Press, a weekly media program on WGBH-TV Boston. His blog, Media Nation, is online at www.dankennedy.net. His book on the New Haven Independent and other community news sites, The Wired City, will be published by the University of Massachusetts Press in 2013.

The newsonomics of Israel’s first paywall

Posted: 06 Sep 2012 09:40 AM PDT

Some people will tell you that that they’re tired of hearing about the digital circulation successes of The New York Times, the Financial Times, and The Wall Street Journal. Their successes are great, but their applicability to other dailies is minimal, the thinking goes. There’s some truth there, of course: The sheer scale of those enterprises makes the revenue impact really impressive. But the fact is that hundreds of dailies of all sizes all around the world are busily constructing digital circulation strategies.

At a time when it is becoming harder to find companies that don’t have paywall plans than those who do — just this week 41 Polish titles organized themselves into a buying co-op, using Piano Media — let’s go micro this week and consider the newsonomics of one new digital pay system. Within the thinking of Israel’s first paywall, we see the challenges of the moment, the calculations, and the 2012 sense of testing and experimentation — and how digital circulation and reader focus is actually providing a rationale for hiring journalists and producing more original, unique content (“The newsonomics of majority reader revenue”).

Haaretz is Israel’s oldest daily, founded in 1918. Amid all the tribulations of Israeli and Middle Eastern history over the next century, it’s often been a valued, rational voice. In short, it’s more about journalism than partisan view. Since 1997, it has carried The New York Times’ International Herald Tribune within its daily English-language edition. As a daily newspaper, it faces all the challenges of its contemporaries around the world: declining print circulation, loss of print ad revenue, and a rocky transition into the future.

Haaretz put up its digital circulation system in April, offering 10 free articles a month of proprietary content; breaking news remains free to view. Though its English-language circulation is a relatively small percentage of its Hebrew-language edition’s, it launched its first paywall around the English edition. Now, it aims to soon extend that system, with early learnings, to the main edition. Therein comes the first lesson that all publishers can learn from: Start small and test, if and as you can.

The early English-language numbers are small by one measure, but impressive by others. “We signed up 1,500 subscribers in the first two days,” says Lior Kodner, head of digital. “We thought it would take months.”

Fifteen hundred isn’t a large number, but in the roughly six months since paywall launch, Haaretz English-language digital subscriber total now surpasses its print number. That number isn’t publicly released, but we can estimate it’s less than 10,000.

In anticipation of its paywall marketing, Haaretz added original English-language content. Until paywall planning got real, Haaretz’s English-language edition has been a translation of its Hebrew-language journalism. Even though Haaretz has cut dozens of other positions as revenues declined overall, Haaretz added 10 positions, seven of them full-time, based in New York, London, and Israel. The positions include a focus on investigative and in-depth reporting. In addition, the website moved to 24/7 coverage.

That new content — even with a paywall — has meant an increase of traffic of 5-10 percent, Kodner says.

Haaretz borrowed its pricing strategy from The New York Times. Along with $2 a week (with an annual commitment) or $2.38 a week (with a monthly commitment), it offers the usual $1 a week intro rate for the first month. Seventy-two percent of subscribers take the annual offer.

If you receive the six-day-a-week print edition in Israel, digital access is now included, part of its all-access offer. If you subscribe to the weekend (Friday) paper, you get digital access for half-price. It also borrowed ideas from the Journal and the FT, including this FT-like grid showing readers their options and what they get for their money very specifically.

About 30 percent of print subscribers have signed up for digital access, with smartphone usage already exceeding web use.

Why start with the English-language product? “This audience is more familiar with paywalls, and paying for content,” says Kodner. “Our Israel audience is not ready yet.”

The Hebrew language paper is clearly the main business, at 60,000-plus circulation. While no date has been set for a paywall for that content, “English is the test case for Hebrew,” Kodner says, and work is proceeding towards that launch.

Haaretz is taking great care as it proceeds: Its influential paper can cost more than three times what other dailies do, and there’s newer competition. Sheldon Adelson, in the news lately for bankrolling Republican candidates in the U.S., publishes the pro-government free daily Yisrael Hayom. That freebie, plus the usual assortment of newspaper pressures, is causing chaos overall in Israeli newspapering. Digital circulation for Haaretz, as increasingly is true around the world, is seen as a survival strategy. Circulation now accounts for about 60 percent of total revenues, up from 50 percent just a year or so ago, given the ad revenue turndown.

We can derive larger, even universal, truths from the Haaretz experience:

  • If you don’t charge them, they won’t pay. Simply making a wanted product paid brought in early and sustained money. The fact that 1,500 people subscribed within two days parallels a common finding of the pay revolution: There’s a substantial core of customers who will pay even before they hit a paywall. Haaretz finds that a third of subscribers pay up early. Just tell them that it’s now paid content, and they ante up.
  • Make mobile real. In July, it added an iPad app (joining iPhone and Android, which launched last November) in advance of the pay system. It has begun using the power of the device, offering a tablet-friendly recounting of the history of Oswiecim, the town in southern Poland where Auschwitz was constructed. So far, it’s seen more than 15,000 downloads of the iPad app.
  • Build a database, early. When Haaretz offered its free phone apps, it required registration. That gave it a database of 60,000 users — of great use when the paid program launched.
  • Monetize far-flung audiences. Eighty percent of Haaretz’s English-language online audience lives in the U.S. and Canada. Print economics didn’t justify North American printing of editions. The audience was there, the brand identification was real, and the willingness to pay existed. A digital circulation system provided a new revenue on-ramp. Language provides one segmentation of customers; geography provides another. In the U.S., as baby boomers retire or flee south for winters, the snowbird market, long talked about, may now become real through targeted, seasonal, paid content.
  • You’ll find customers in odd places. Haaretz is finding new paying customers in the wider Middle East — in Kuwait, in Lebanon, and in Iran. “We got people from Iran who complained to us online that our checkout system didn’t work. “It turned out that their government is blocking the transaction,” says Kodner.
  • Back up your offer with…journalism. It’s tough to talk cost-cutting publishers into new investments in journalists. But Haaretz took that step to fortify a business opportunity. Too often, publishers have gone to the pay market with newly cutback products — ones that hardly generate enthusiasm among customers. As with investing in news video (“The newsonomics of leapfrog video”), publishers must add as well as subtract if they are to find a path to growth. “You can’t just say to people it’s time to pay. You have to give them a reason to pay,” says Kodner.

So far, we’ve seen widely varying paywall results. At worst, digital circulation strategies are stabilizing circulation revenues. At best, we see companies like The New York Times and Star-Tribune reaching for high-single-digit increases in circulation revenue. As we go forward throughout the next year, we’re seeing a real playbook being written — a basic checklist of a dozen or so strategies that make all the difference in revenue success. Haaretz now contributes to that playbook.

Photo by boublis used under a Creative Commons license.

Martin Langeveld: Journal Register’s bankruptcy is strategic, all right — but for whom?

Posted: 06 Sep 2012 08:44 AM PDT

Yesterday’s news that Journal Register Company was filing another Chapter 11 bankruptcy could signal the end of any options for Digital First, or any other industry player, to engage in what Ken Doctor described here as a “roll-up” or consolidation strategy.

Last year, looking at the Alden Global Capital acquisitions of MediaNews Group and Journal Register, I speculated that Alden, working through industry veteran John Paton, could be aiming for a consolidation strategy that would combine many more newspapers under common control. A bit later on, MNG’s outgoing CEO, Dean Singleton, confirmed this strategy in an interview with me.

Perhaps, I wrote, consolidation would have the positive connotations spelled out by Doctor, which were pretty much echoed by Singleton: economics of scale in advertising, production, news gathering, distribution. (Or maybe it was the other way around and Doctor was echoing Singleton, who has always looked for opportunities to be found by assembling regional clusters of newspapers.)

But in the year since then, under the yoked management, no significant consolidation took place. Yes, new savings were squeezed out of existing newspaper groups. Both MNG and JRC had newspapers in New England, allowing for some managerial consolidation there. Here and there, printing facilities were closed and the work outsourced or moved to other company-owned plants.

And certainly, Paton pushed with all his might to move hidebound ad departments and newsrooms toward “digital first” thinking. But this is hard to do when many of the papers still have front-end systems that were installed to solve Y2K problems and are to this day incapable of inserting hyperlinks into online text. Not to mention that many have websites that look even older than Y2K. On the other hand, new site and app designs are said to be in the works at the company’s digital skunkworks in Denver (The Denver Post’s snazzy, groundbreaking new iPad app, recently unveiled, could be a promise of good things to come).

But it’s now clear that the “stacking of digital dimes” to replace digital dollars hasn’t happened fast enough. And if there actually was an Alden-led strategy at Digital First to truly capitalize on the combination’s clout through new mergers and acquisitions, it failed.

Roll up or mop up?

Which brings us to the other, more cynical view of what’s meant by consolidation, as I expressed it last year in a comment to Doctor’s post. Doctor’s post presents the roll-up optimistically: a grand exploitation of clustering and super-clustering strategies, resulting in an industry that by 2016 is greatly reshaped but ready for the digital age. That kind of roll-up, which would have required JRC and MNG to take on new debt, is essentially the strategy once pursued by Mitt Romney at Bain Capital, where it was called “leveraging up.”

Alden has shed around half of its newspaper holdings in the past year.

But to execute the roll-up, you need access to new capital in the form of debt, which the Digital First empire was evidently not able to find — even in the case of MNG’s attempt last year to acquire Freedom Communications, where Alden had a stake in both sides of the deal and should have been able to make it happen.

Not only were banks and other lenders apparently unwilling to put money into the Freedom deal — they were also unwilling to finance a true merger of MNG and JRC. Hence the oddball structure in which both companies outsourced their general management to Digital First with Paton at the helm. While this allowed Paton to create a consolidated management operation, it must have been intended as a temporary expedient, just until the markets loosened up enough to permit an actual merger and to permit the roll-up strategy to begin.

In any event, in that comment on Doctor’s post, I suggested the alternative: It’s a not a roll-up but a mop-up, a way to cheaply buy the remaining assets, sell the hard assets that can be sold, squeeze the last profits out of those that can’t, and call it a day. (Pretty much what Mitt Romney and Bain Capital would do about one-third of the time when they couldn’t make the deal roll up.)

With a second bankruptcy in the works, I believe that’s what it’s now come to at JRC, MNG, and Digital First. While Warren Buffett may see value in acquiring newspaper assets, Alden seems more interested in squeezing the mop, rather than investing in any more.

Alden Global Capital is souring on newspapers

Much of this may be driven by the fact that Alden Global Capital, itself, has been gradually exiting the newspaper field for the past year.  The reclusive Randy Smith, who heads up Alden, talked up the potential of Gannett and newspaper stocks in general at a rare appearance last October, calling Gannett “the most undervalued security that [he] knows of.” His paraphrased views about newspapers in that talk, from someone taking notes:

The first thing you need to accept is that print is declining. What’s good though is the digital migration. The decline in print revenues is being offset by the increase in digital. In addition, newspaper companies have a lot of assets that probably aren’t being fully utilized and could be sold off. Across the board, newspapers are cutting costs very rapidly and most have positive free cash flow due to the low capex [capital expenditures] requirement of the business.

Contrast this with Warren Buffett’s view, expressed this year as he acquired a clutch of newspapers including most of Media General’s holdings:

In towns and cities where there is a strong sense of community, there is no more important institution than the local paper. The many locales serviced by the newspapers we are acquiring fall firmly in this mold, and we are delighted they have found a permanent home with Berkshire Hathaway.

You need to read between the lines a bit, but clearly Smith’s views were driving a financial play, not a value-driven investment view like Buffett’s (though the jury is certainly still out on whether the Sage of Omaha knows what he’s doing in this case). And the trouble that Smith and other hedge fund operators found themselves in, at the time of that talk and ever since, is that despite multiple rounds of government bailouts, stimulus plans, quantitative easing by the Fed, and historically low interest rates, access to debt capital for risky ventures is still extremely tight.

The way Smith put it back in October (again, paraphrased by the notetaker): “Today, there is a kind of shutting down of some parts of access to capital for certain troubled companies.” That puts a crimp in the style of “distressed opportunities” hedge fund operations like Alden, which has seen its total holdings fall precipitously, from $3.5 billion in early 2011 to $2.1 billion as of June 30 as investors cash out and look elsewhere. As a result, they’ve not only been unable to execute leveraged debt strategies at the companies they control — they’ve been forced to sell significant chunks of their media holdings.

At Alden, the media sales desk has been particularly active. Over the 12 months ending June 30, according to SEC filings, Alden sold 5.6 million of its 9.2 million shares of Gannett, 50,000 of its 1.3 million shares of McClatchy, 267,000 of its 456,000 shares of A.H. Belo (Dallas Morning News), all of its 213,000 shares of Journal Communications (Milwaukee Journal Sentinel), and all of its 107,000 shares of Media General. No wonder Randy Smith was talking up those shares last fall.

Those are just the changes in publicly reportable holdings. On the privately-held side, Alden and fellow hedge fund Angelo, Gordon & Co. sold their stake in the Philadelphia Media Network at a loss of $84 million. And Freedom Communications, in which Alden held a significant stake, was finally sold last month to Aaron Kushner, a former greeting-card company executive. In addition, Alden still has stakes in long-bankrupt Tribune, the Canadian newspaper group Postmedia, and a few non-newspaper broadcast media firms.

Last year in July, I estimated the Alden’s total media investments to be about $750 million. Today, after the various sales and counting JRC’s value as zero, those holdings are probably down to about $300 million, and it seems clear that Alden would just as soon get out completely — at least from newspapers.

Is this the exit strategy?

So what happens next? Two big questions: Will MediaNews Group follow Journal Register into bankruptcy court? And, despite the existence of a “stalking horse bid” by an Alden affiliate, who will actually end up in control?

First, regarding MediaNews — it too went through a previous strategic bankruptcy, emerging in March 2010 (seven months after JRC did) with $165 million in debt, down from $930 million pre-bankruptcy. Since then, it’s probably paid off about a quarter of that, leaving perhaps $125 million. But like JRC, MNG is also saddled with legacy costs like an underfunded defined benefit pension plan. As of January 2011 (the most recent reporting date), that plan was only 67.6 percent funded, with a funding gap of more than $22 milion. (Full disclosure: As a former MediaNews employee, I’m a beneficiary of that plan.)

MNG has used permissible funding-method elections to delay payments and spread the cost over the next 15 years, but will have to begin making payments in 2013 to cover the underfunding. Given that both companies are managed by Digital First and controlled by Alden, and both have similar “legacy obligations incurred in the past,” Alden’s preference might be to shove MNG back into bankruptcy court, as well. However, MNG is about four or five times the size of JRC, which means its debt load is relatively much smaller and more easily carried — at least for now. So MNG probably won’t be following suit in the near term. But that could change in a year or two if print advertising revenues continue to slide (and I think they will).

Secondly, what about that “stalking horse bid?” The way I read it, there’s no particular guarantee that that bid will be successful, allowing Paton to stay in control. A stalking horse bid is entered simply as a way to set a minimum value on the company. Others could come in with higher bids, although of course, potentially the Alden-related “stalker,” 21st CMH Acquisition Co., could increase its bid. Of course, given Alden’s recent history of ongoing newspaper divestitures, rather than acquisitions, it might well be inclined to sell out rather than bid up. (By the way, an unsuccessful stalking horse generally receives pre-negotiated “breakup fees” as a consolation prize.)

In this case, the stalking horse is identified as an “affiliate” of Alden Global Capital — presumably, it is a company separate from Alden itself but controlled by its CEO Randy Smith and/or other executives. If that’s the case, whether he wins the bid or not, Smith would be removing JRC from the Alden portfolio he shares with other investors. If he loses the bid, he earns breakup fees for his trouble. If he wins, he ends up owning JRC free and clear, and would likely start looking to pick up MediaNews Group in the same way — which would finally clear the way for a merger and, conceivably, re-open the path to consolidation.

But getting to that scenario means piling up a lot of ifs, and I would’t bet on it happening. My guess is that the stalking horse bid is simply there to help gain creditor buy-in to the structured bankruptcy deal, and that at the end of the day, Smith would be happy to let someone outbid him. Who knows, maybe that would be Warren Buffett.
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