READING, Pa. (AP) – A federal bankruptcy judge said Wednesday he intends to approve the sale of the Reading Eagle to a large newspaper chain known for taking over struggling papers and then making deep newsroom cuts.
MediaNews Group, better known as Digital First Media, offered $5 million for the assets of the family-owned Reading Eagle Co., which filed for bankruptcy protection in March.
Chief Judge Richard E. Fehling said Wednesday he plans to sign off on the sale.
Digital First owns about 200 papers and other publications, including The Denver Post and the Boston Herald. Its biggest shareholder is Alden Global Capital, a New York hedge fund that invests in distressed companies.
Digital First has a reputation for deep cost cutting, leading to fears the Eagle will be gutted. The paper began publishing in 1868.
“The Reading Eagle has always had an outsized role in defining this community. It is far and away the dominant source of news,” said Kevin Murphy, CEO of the Berks County Community Foundation.
He said hundreds of people have talked to him about the paper since it entered bankruptcy.
“I don’t remember anything in 25 years that has jolted this community more than this bankruptcy news,” he said. “It has been a process of shock and grief.”
The Eagle, where the late “Rabbit, Run” novelist John Updike got his start, has an average daily circulation of more than 37,000 on weekdays and more than 50,000 on Sunday. The Reading Eagle Co.’s other properties include news-talk radio station WEEU and a weekly newspaper. It employs more than 200.
In court papers, Digital First said it plans to take WEEU off the air unless someone buys its FCC license.
Like many other newspapers, the Eagle has struggled with declining ad revenues. It was also burdened with heavy debt from the 2009 expansion of its downtown printing press and distribution center. The newspaper said it has been losing millions of dollars a year.
“We’re either going to have a sale, or we’re going to have a liquidation,” Reading Eagle lawyer Robert Lapowsky told the judge Wednesday.
Peter Barbey, the president and chief executive of the Reading Eagle Co. – whose great-great-grandfather started the paper – had been loaning it money to keep it afloat. He declined immediate comment after the hearing, saying he planned to issue a statement through the paper.
Through a spokesman, Digital First said it was “pleased to save the Reading Eagle from liquidation and help ensure the people of Berks County don’t lose access to an important source of local news and information, as has unfortunately happened in too many communities across the country.”
The company said it will “re-create” the Eagle so the paper “has the appropriate resources” to provide local news coverage. Digital First did not say how many of the paper’s workers it plans to lay off or whether it will reduce the number of days it publishes a print edition.
Hundreds of U.S. newspapers have shut down over the past 15 years as news consumers have migrated to the internet. The number of reporters, editors, photographers and other newsroom employees in the industry fell by 45% nationwide between 2004 and 2017, according to the Pew Research Center.