JEFF BAENENMINNEAPOLIS (AP) ¿ A former publisher of The Wall Street Journal and the head of a newspaper company are among four new board members chosen by the Star Tribune's main lenders to lead the newspaper after it emerges from bankruptcy protection. The Star Tribune said Monday that unless another buyer emerges, its board of directors will include L. Gordon Crovitz, former Wall Street Journal publisher; Michael T. Sweeney, managing partner of the Minneapolis private equity firm of Goldner Hawn Johnson & Morrison; former banker and investor William F. Farley of Minneapolis; and Michael E. Reed, head of GateHouse Media Inc. of Fairport, N.Y. Two additional board members are expected to be named later. Sweeney also would be chairman of the new board. Current Star Tribune publisher and chairman Chris Harte plans to leave the newspaper. A new CEO of the Star Tribune also will be named before the paper emerges from bankruptcy. Currently there is no CEO, but Harte essentially has that role, Star Tribune spokesman Ben Taylor said. "This is a board that can challenge and advise the new Star Tribune CEO in crafting winning strategies and finding new revenue streams while operating the current business as efficiently as possible," Brad Pattelli, managing director of Angelo Gordon & Co., one of the Star Tribune's senior secured lenders, said in a news release. Pattelli is on vacation and did not immediately respond to an e-mail request seeking comment.
Sweeney, 51, told The Associated Press that he made a long-term commitment to be involved on the board. "I think a local newspaper company like the Star Tribune is the epitome of a local business," said Sweeney, who previously served as president of Starbucks Coffee Co. (UK) in London. "So it's a pleasure to be involved in such a local business." Faced with plunging ad and circulation revenue and heavy debt, the Star Tribune filed for bankruptcy protection last January. The Chapter 11 filing came less than two years after Avista Capital Partners, a private equity firm, bought the Star Tribune for $530 million from The McClatchy Co. The Star Tribune said it needed $20 million in cuts from labor unions in order to survive. The newspaper reached agreement on concessions with all 10 of its unions while in Chapter 11. A confirmation hearing on the Star Tribune's reorganization is scheduled for Sept. 17 in federal bankruptcy court in New York. Under the plan, the newspaper's major secured creditors would swap $430 million in debt for control of the company, plus $100 million in new debt. The Star Tribune expects to emerge from bankruptcy protection on Sept. 28. Two of the Star Tribune's proposed new board members have wide-ranging media experience.
Crovitz left The Wall Street Journal as publisher when Rupert Murdoch's News Corp. took over Journal publisher Dow Jones & Co. in late 2007. Crovitz was a Dow Jones executive who oversaw the growth of that company's online businesses. He now writes a weekly column on technology issues for the Journal. Earlier this year, Crovitz teamed up with two other media veterans ¿ Steve Brill, the founder of Court TV and American Lawyer, and former cable television executive Leo Hindery ¿ to form Journalism Online, which plans to sell news online. Reed is CEO of GateHouse, which owns 92 daily newspapers and more than 500 community newspapers in 21 states, including Minnesota. He is a member of The Associated Press board of directors. Media analyst Ken Doctor, a former managing editor of the St. Paul Pioneer Press, praised the selections of Crovitz and Reed for their expertise in online and operational efficiency, respectively. Doctor said finding someone with "state-of-the-art advertising knowledge" would be key for the remaining board positions. "Advertising continues to be the main driver of media revenue and it is a fast-changing business," Doctor said.
The resumes of the media people on the new board appear impressive, said Graydon Royce, co-chairman of the Star Tribune's unit of the Newspaper Guild, which represents newsroom employees. "The question that's foremost in our minds is how long (the secured creditors) will hold on to the property, and we just don't know that right now," Royce said. Last March the Star Tribune had the 14th-highest weekday circulation in the United States, with an average of 320,076 over a six-month period. The Star Tribune's Sunday paper is the nation's 11th top-seller, at 497,678. ___ On the Net: Star Tribune Co.: http://www.startribunecompany.com