New rivals, Chapter 11 for flagship papers

pavelich4The Philadelphia Inquirer, once a pillar of  journalism, filed for Chapter 11 bankruptcy late Sunday, along with a chain in Pennsylvania, as Bloomberg reports.

But that’s not all of the change sweeping through the industry: The Union’s owner, Reno-based Swift Communications, faces new competitors as it shuts down some of its newspapers to cut costs. So are other chains with dominant newspapers in their markets.

In the case of the Pennsylvania newspapers, debt load was the big problem. Gene Roberts, a legend in newsrooms, was the Inquirer’s editor in its heyday. It won 17 Pulitzers in 15 years in the ’70s to ’90s, a record.

Most newspapers will survive because of their strong branding. Where some of them disappear or get sold, smarter, more nimble competitors will fill the voids.

Where closely held  Swift, owner of The Union, has closed some newspapers in its chain, new ones are popping up. One example is a Spanish-language newspaper in Colorado, backed by another startup, the Vail Mountaineer.

The Mountainer already is competing with Swift’s flagship paper, the Vail Daily, sucking away some revenue. Here’s the background on the Spanish-language paper, as well as a report on the Vail Mountaineer and its millionaire owner Jim Pavelich (who, ironically, sold the Vail Daily to Swift back in 1993) and is shown in the photo.

Don’t worry. Most  small towns will still have a newspaper. Just stay tuned for the shakeout.

(photo coutesy of trekkerphoto.com)

Citizens Bank’s troubled loans total $12.4 million

Nevada City-based Citizens Bank had $12.4 million in troubled loans as of year-end, The Sacramento Bee reported.

As was stated previously, Citizens received $10.4 million in TARP funds.

This is the first time, however, that an aggregate figure for troubled loans has been reported for the bank. In the past, it has been piecemeal, such as the foreclosure proceedings of North Star or The Highlands in Grass Valley. 

The Bee did a good job summing up that “Federal aid fails to spur lending at two Sacramento-area banks.”

I wonder what Silicon Valley VCs could do with that kind of money. (See my post below).

It’s the Silicon Valley stock options, stupid!

Lost in all the hundreds of billions of dollars in Fed handouts to banks, the automakers and others is how we — and in California in particular — really pump up our economy, balance our government budget and fuel home sales.

It’s the stock options, stupid, largely the ones from Silicon Valley. It’s fun to joke about the dot.com boom and all the failures, such as Webvan and Pets.com.

But Silicon Valley innovation also propelled the stocks of a wide range of tech and NASDAQ companies in the late ’90s. It even prodded some Dow stocks out of their slumber.

More important, people forget that the wealth created by Silicon Valley stock options — and people cashing them out — helped pay for government’s mounting bills. You know, CALPER’s generous pensions and social services in rural counties (with little job creation) such as ours.

When I worked at CNET (taking a career risk) I got taxed up the wazoo for cashing out stock options, including the dreaded alternative minimum tax.

Living in a rural county now, in a land dominated by government jobs and “double- and triple-dippers,” I see where the tax money went. Much of that is OK, though not the double-dipping part.

The money also helped propel our housing market, and the housing market in Tahoe. That’s OK too, though real estate and mortgage people who accelerated the trend with questionable loan practices, ruined it for the rest of us.

(Thomas Hastert of Loan Sense in Grass Valley is just one of them who comes to mind. There are others around here.)

Most people, including the press, doesn’t understand the “trickle down” from Silicon Valley to the rest of the state or nation. They’re too busy chasing down scoundrels on Wall Street.

I’m glad Google chief executive Eric Schmidt is an adviser to President Obama. Bush never got that.

(Schmidt’s connections in Silicon Valley, more than phenomenal smarts, got him that job. Schmidt’s tenure at Sun Microsystems wasn’t that successful. You know, the “good old boys network,” just like here. In this case, it was venture capitalist John Doerr of Kleiner Perkins in Silicon Valley who was Schmidt’s “rainmaker.” Doerr invested in Sun and Google.)

Still, recruiting Google’s Schmidt is a step in the right direction for Obama, just like having ex-Ebay chief executive Meg Whitman run for governor in our state. Both of them get the SV-California connection.

So maybe we should get some policies in place to encourage innovation in Silicon Valley again. Not every venture succeeds, but the ones that do can drive our economy and balance our growing government budgets.

Nowadays the bet in Silicon Valley is on “green” technology. Despite the naysayers, the idea has legs.

Maybe it’s time to roll the dice with the Silicon Valley VCs instead of the banks or automakers. That’s where I’d put my money.

In fact, without it, we’re in deep trouble. Our governments have shown time and time again they don’t know how to cut costs, so we better raise some revenue. The banks and automakers are a defensive play, not an offensive one; AKA “yesterday’s lettuce.”

Will a stripper win an Oscar tonight?

The Oscars are tonight, and some people think a stripper will win — in this case Marisa Tomei for her role in “The Wrestler.”

Sex sells in Hollywood, as the Wall Street Journal points out.

The paper reminds us that Natalie Portman was nominated four years ago for playing a stripper in “Closer,” while Elisabeth Shue, Mira Sorvino and Julia Roberts all were Oscar nominees for “playing women who sell their bodies but guard their heart.”

I enjoy reading the weekend Journal. It is a good example of retooling a newspaper for a broader audience. You can get a one-year subscription to The Journal for $99 now with a special offer. How sad but a good recession buster.

On weekends, I also like reading The Union’s “Sunday Express.” Check out the cover story on the new nonprofit theater group, “Sierra Stages.” 

(You’ll have to look past the glaring typo at the beginning, however: confusing “its” and “it’s.” It’s  — as opposed to its — why you need an editor, who always spent extra time on the Sunday cover for just this reason.) C’est la vie.

The Oscars start at 5 p.m. on ABC and at http://www.oscar.com. Might be good weather for a fire in the fireplace and lap food such as a bowl of chile verde.

Enjoy!

UPDATE:

Marisa did not win.

Will the mine rancor trip up other projects?

The groundwork is being laid for a knock-down, drag-out debate whether to reopen the Idaho-Maryland mine.

But here’s a twist: I’m starting to hear buzz whether the fight to reopen the mine — more contentious than the growth measures or NH 2020 — will stall what some leaders see as more desirable projects that are in the pipeline, such as housing at Loma Rica Ranch and Kenny Ranch.

While die-hard no-growthers oppose all housing projects, more middle of the road people see both of these as “smart growth” plans, with lots of walkable space. This group includes influential people in business and government.

The same people are more on the fence about reopening the mine, however, citing concerns about air pollution and traffic. Others point to some tech firms — a real asset here — who fear vibrations from the mine will interrupt their business.

The local paper seems to be gung-ho for the mine to reopen — both in its editorials and on the news pages.

I was surprised to see an article above the fold on Feb. 4 about an alleged vandalism incident back in May 2006. The headline read “Grass Valley Mine Shaft vandalized.” It was not breaking news. It should have been promoted in a less prominent place.

This morning, the lead news item is “Mine touts investments as gold hits a grand.” It suggested that the mine would fetch $5 billion on the open market.

But that’s misleading: Gold price fluctuate wildly, the city would see no sales tax from that, and sales from the ceramic tile plant are highly unpredictable.

I’m glad the article raised some of these issues, but I wondered about the article’s positioning on the front page — as with the earlier one. 

Some smart, middle of the road business people around here also are questioning the experience of Emgold, which is trading at 5 cents per share and has not opened a gold mine before. 

I like the idea of a ceramic plant as a side-light business and think the management is earnest. But it would be a big mistake to assume that just the “no-growthers” are opposed to reopening the mine.

It will require some straight talk and diplomacy for both sides to get their arguments across — not the same old “Yosemite Sam” shootout.

I’ll be watching for that, as well as the impact on the housing projects.

Hastert charged — read the complaint here!

Here’s the press release for the charges filed against Thomas Hastert at “Brown Files Criminal Charges Against Broker who Masterminded Elaborate Real Estate Scheme.”

Hastert, who ran the Grass Valley mortgage firm Loan Sense, has been under investigation for months. A source told me just this week that charges were expected to be filed within the month. Bingo!

To read the complaint online and the declaration from the investigator, just click on the PDF at the bottom of the press release. The complaint is 30 pages long and offers lots of details, as does the 9-page declaration.

You might recognize some of the names in the narrative. I did!

Being able to access these court documents online is a good example of the benefits of Web versus print. 

““This man brazenly deceived investors and borrowers, promising high returns and easy loans, ripping off his customers for his own personal enrichment,” said state Attorney General Edmund Brown. “Ultimately, this criminal scheme collapsed when many of these loans failed, costing hundreds of people more than $20 million.”

GV’s Dorado Chocolates expands in Reno

Here’s a small-town scooplet: Dorado Chocolates of downtown Grass Valley has just opened a store in Reno.

How’s that for an economic bright spot? Expanding your business in a deepening recession.

It’s a credit to the fine chocolates, which are delicious. Billionaire Warren Buffet also is a chocolate fan: He own See’s Candies.

We like their dark chocolates. The Valentine’s ones are on sale for half off. I just snagged a box — same designer chocolates at half price. Just toss the heart-shaped box.

Also, did you know that dark chocolate is a “super food“?

It just goes to show you that in a recession, a world-class product sells. Reminds me of the ongoing success of New Moon in Nevada City.