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Show World&Nation Page 8 Monday, Nov. 30, 2009 Tough economic times turning newspaper lenders into owners SAN FRANCISCO (AP) — Newspaper headlines have skewered money lenders for dubious decisions that stoked the recession. Now the financiers are starting to headline newspapers in a new way — as the owners. These newspaper novices are taking control through bankruptcy proceedings and giving few clues about their turnaround plans. Their decisions will be crucial because this new age of media ownership is unfolding at a time that could make or break some of the largest publications. Banks and other financial firms have taken over or are angling to take charge at dozens of newspapers, including four of the nation's 15 largest — the Los Angeles Times, Chicago Tribune, the Star Tribune in Minneapolis and The Philadelphia Inquirer. The new owners face huge problems. Newspaper ad revenue, the industry's main source of income, is on pace to total around $27 billion this year, about $22 billion less than three years ago. Newspaper circulation is falling faster than ever. Finding solutions — such as mining Web sites for more revenue while newspapers protect what's left of their print franchises — will likely require a financial commitment that short-term owners might be reluctant to make, says Fitch Ratings analyst Mike Simonton. Lenders that take over a company through bankruptcies typically try to sell their stakes within two to three years. But there's another way of looking at this transition: The last few years have gone so badly that newspapers need to try something different — and "new blood in the industry" could help, says John Temple, who was publisher of The Rocky Mountain News in Denver when its owner, E.W. Scripps Co., closed it in February. A common theme in newspaper bankruptcies is that publishers took on too much debt to pay for acquisitions in better times. Now the banks that financed those deals are hoping to recoup at least some of their investments by forgiving or writing off most of the debt — in exchange for controlling stakes in the publications. Instead of trying to engineer a turnaround, the new owners could just close the newspapers and auction off their assets. But Simonton doubts that will happen because newspapers don't have a lot of valuable inventory like retailers that have been liquidated. Instead, the bleak market conditions make it more likely that some newspapers are bound to be owned, even briefly, by bankers such as JP Morgan Chase & Co. and financial firms such as Angelo, Gordon & Co., which specializes in buying the debt of distressed companies. So-called "loan-to-own" investors such as Angelo, Gordon at least have experience taking over companies. Banks don't have much, because government regulations say banks aren't even supposed to own pieces of companies. The government makes exceptions when banks are exchanging debt for stakes in companies that can't repay their loans — but the banks have to sell those holdings within five years, unless they get a waiver from regulators. It's a situation banks don't want to be in, said Marc Abrams, a New York lawyer who represented newspaper publisher Journal-Register Co. while it was in bankruptcy protection this year. JP Morgan leads a group of banks that now own pieces of the Journal-Register, whose newspapers include the New Haven Register in Connecticut and The Oakland Press in Michigan. "The first question these banks have is: 'What is my exit strategy?"' Abrams said. As part of that process, the bankers will likely try to figure out whether their newspapers have the right management in place and determine how much more money they're willing to sink into the industry, Abrams said. Victims being identified after Russian train wreck; authoritites blame terrorist bomb MOSCOW (AP) — Russians mourned at religious services and soccer stadiums Sunday after a deadly train wreck that authorities blamed on a terrorist bomb. The leader of the Russian Orthodox Church urged the nation not to give in to fear. Relatives identified loved ones killed in the wreck of the express train that authorities say was blown off the tracks by a blast. If confirmed as caused by a bombing, the wreck would be Russia's deadliest terrorist attack outside the violence-plagued North Caucasus provinces in five years. Television networks took entertainment programs off the air and moments of silence were observed before matches on the final Sunday of the Russian football league. Patriarch Kirill, the leader of the country's dominant church, led a prayer service for the victims at Christ the Savior Cathedral near the Kremlin. He urged Russians to help authorities and "display firm will for a victory over terror." "Our people have been challenged. A crime of which any one of us could have been a victim has been committed for effect," Kirill said in a statement posted on the church's Web site. "They want to frighten everybody who lives in Russia." The rear three cars of the Nevsky Express, one of Russia's fastest trains, derailed on a remote stretch of track late Friday as it sped from Moscow to St. Petersburg, killing some passengers and trapping others in the jumbled wreckage. The head of Russia's Federal Security Service, Alexander Bortnikov, said Saturday that an explosive device detonated underneath the train, gouging a crater in the railbed and pulling the tail cars off the tracks. Emergency Situations Minister Sergei Shoigu said at least 25 people were killed and 26 others were unaccounted for, though he indicated some of them may have survived uninjured or never have boarded the train. Health Minister Tatyana Golikova said 85 people remained hospitalized, 21 of them in grave condition, according to Russian news agencies. A Belgian and an Italian were among those hurt. Relatives were identifying victims Sunday at a hospital morgue in Tver, the closest sizable city to the wreck site near the border of the Tver and Novgorod provinces, about 250 miles (400 kilometers) northwest of Moscow. The state-run railway company Russian Railways said train traffic was fully restored. INVESTIGATORS AND RESCUE WORKERS are seen amid wreckage and damaged coaches at the site of a train derailment near the town of Uglovka, some 400 km (250 miles) north-west of Moscow, Russia, Saturday, Nov. 28.An express train carrying hundreds of passengers from Moscow to St. Petersburg derailed, killing dozens of people and injuring scores of others in what may have been an act of sabotage, Russian officials said.AP photo There were no credible claims of responsibility or word on a possible motive. Russia has been hit by a number of major terrorist attacks since the 1991 Soviet collapse, most of them linked to the devastating 1990s wars between government forces and separatist rebels in Chechnya and the violence the conflicts have spawned across the surrounding North Caucasus. Extreme nationalists were blamed in a similar blast that caused a derailment along the same railway line in 2007, injuring 27 passengers. Authorities arrested two suspects in the 2007 train blast and are searching for a third, a former military officer. Warming: Are local resorts in trouble? Feast of the Sacrifice in New Delhi continued from page 2 MUSLIMS OFFER PRAYERS on the festival of Eid al-Adha at the Jama Masjid in New Delhi, India, Saturday, Nov. 28. Eid al-Adha, or the Feast of the Sacrifice, is celebrated to commemorate the prophet Ibrahim's faith in being willing to sacrifice his son. AP photo Commute FARE FREE! Senator, Orrin Hatch, recently teamed up to oppose federal cap and trade legislation that many in the ski industry support, saying it could cost jobs in a state that's heavily dependent on coal for energy. In the posh ski resort town of Park City, a former mining town that played host to the 2002 Winter Olympics, Mayor Dana Williams says some state leaders don't seem to grasp how important the ski industry is to the state and what a threat global warming is. Tourism is a growing $7 billion a year industry in Utah and the state's 13 ski resorts are directly responsible for roughly $1 billion of that. Williams says the very future of the city that hosts the Sundance Film Festival each winter is at stake with rising temperatures. A consultant's report released by the nonprofit community Park City Foundation this fall warned that by 2030 the decrease in snowpack caused by global warming could lead to the loss of more than 1,100 jobs and a $120 million economic loss in that community alone. By 2050, the report says those figures could jump to more than 3,700 lost jobs and a $392 million econom- Perfect Partner is loss as fewer and fewer slopes in the area are able to open and lure visitors from around the world. The CEOs of Park City's three resorts — The Canyons, Deer Valley and Park City Mountain Resort — have teamed up to educate anybody who will listen about how global warming threatens their businesses, with Park City Mountain Resort taking the lead. That resort's corporate parent, POWDR Corp., owns resorts in and near Las Vegas, Killington, Vt., Lake Tahoe, Calif. and central Oregon. 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