Wednesday, March 15, 2006

A Post for People Who Think That NonMonkey Is a Drooling Twerpface That Rarely - If Ever - Knows What He's Talking About

Your suspicions are confirmed:

I have heard the editors of this newspaper say as much for as long as I can remember: It's good for the Star Tribune to have top-notch competition in St. Paul. But we are now out of the realm of theory and into the realm of concrete actions. The McClatchy Co., which owns the Star Tribune, is buying Knight Ridder, the company that owns the Pioneer Press and 31 other newspapers and plans to sell the Pioneer Press to some as yet unknown third party.

The new owners for the Pioneer Press could be gangbusters. Or they could be press busters: Corporate pirates who come to town to plunder everything of value before setting fire to the wreck. Which it turns out to be is crucially important. And, largely, up to McClatchy, which has become temporary guardian of journalism in St. Paul, a key part of the region served by the Star Tribune.

Beware the liberal who uses the word "corporate".

Nobody's going to buy the Pi Press just to liquidate. It's just not worth it. It's an asset poor business, for one thing. It's not like liquidating an airline where you can most of the value is tied up in the equipment, and not in the intangibles.

That's spelled "I-N-T-A-N-G-I-B-L-E-S" Nick. That's a balance sheet item of which a large percentage of its value is represented by something called "goodwill".

"G-O-O-D-W-I-L-L"

Simply put, goodwill is the rather nebulous concept of the monetary value of the business as a going concern. And I'm fairly certain that, despite its recent struggles, the PiPress' goodwill is at a level well north of, say Northwest Airlines. The problem is you can't sell goodwill unless you include the rest of the business assets along with it. You start selling off the printing presses, buildings, computers, equipment, Brian Lambert Nonsense Translators, etc. and you lose the value you paid in the deal for the intangibles.

Not a real smart investment move. But I wouldn't expect NonMonkey to understand that.

"U-N-D-E-R-S-T-A-N-D"

The only way it would make sense for a PiPress buyer to, uh, "corporately raid" the newspaper would be if McClatchy sold it for a price far less than its book value. The FTC might have something to say about that.

"F-T-C"

To say nothing of the company that is now in debt up to its eyeballs because it just purchased, among others, the newspaper in question.

Condescension is fun!

The Bananaman may or may not have more.

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