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Failure isn’t what it used to be. Bankrupt newspaper companies are following the lead of AIG and Lehman Brothers and rewarding executives with large bonuses. The Tribune Co. is trying to pay out $13 million in bonuses, the Journal Registers Co. is trying to pay $2 million, and Philadelphia Newspapers has already given hundreds of thousands in bonuses to its corporate officers. Company spokesmen say the bonuses make good business sense by rewarding good performance and keeping executives from leaving the companies. Both arguments are hollow. The first rationale rewards performance in running the companies into the ground and the retention rationale assumes other newspaper companies are hiring and would want to hire the tainted executives. The issue of bonuses has emerged because newspapers filing for bankruptcy are not liquidating, but using Chapter 11 to create reorganization plans that will allow them to change the terms of the debt and union contracts. They have to seek approval from

Judging from the continuing panicked commentary by big media journalists and commentators, newspapers are dead and dying. They are comatose, the family is gathering at the bedside, and quiet discussions are taking place about whether to disconnect them from life support. Walter Isaacson writing in Time Magazine last week told us that “the crisis in journalism has reached meltdown proportions” and that we can save newspapers by starting to make micropayments for articles we read online. http://www.time.com/time/business/article/0,8599,1877191-4,00.html David Carr, writing in New York Times, this week tells us that a “digitally enabled free fall in ads and audience now has burly guys circling major daily newspapers with plywood and nail guns.” We need to start charging for news, forcing aggregators to pay, turn away from ad support, and start thinking about new ways of collaboration even if they require a new antitrust exemption. http://www.nytimes.com/2009/03/09/business/media/09carr.ht

Recent weeks have not been kind to newspaper company finances, with lost value and unhappy investors plaguing publicly traded firms. The Journal Register Co. was delisted from New York Stock Exchange because it share price remained below $1, reducing its market capitalization about $12 million, less than one-fifth the capitalization required to be traded on the big board. The Sun-Times Media Group stock also continued trading below $1 and its market capitalization dropped to $61 million, drawing a delisting warming from the New York Stock Exchange. Although those firms have hardly been notable as the best managed firms in recent years, their problems in inspiring investors are symptomatic of difficulties facing newspaper firms in the market. Meanwhile, Moody’s Investors Service lowered the New York Times and McClatchy Co. debt ratings and lowered the Gatehouse Media even further in the junk category. Other firms are also having problems with capital related issues. Rumors are rampant t