By Jim Bleyer
With approximately $100 million in debt and operating nowhere near profitability, the Tampa Bay Times is in its death throes as a viable, traditional newspaper entity, Tampa Bay Beat has learned.
The pension plan is in jeopardy. Assets have been mortgaged. Filing bankruptcy could very well be on the horizon.
Some creditors know this. So-called “local investors” must be aware of it. But worst of all, Publisher Paul Tash, who also serves as board chairman of the Poynter Foundation, has been cognizant of the deteriorating financial situation for several years.
The Poynter Institute is the parent company of the Times.
Tash, the $550,000-a-year chief executive, using a three-card-Monte ploy to stave off bankruptcy, seizure of assets, and an ignominious finality to a longstanding media entity, has known for some time the company’s pension plan is at extreme risk. Times employees have a regular payroll deduction for pension benefits but it could very well be funneled into financing current operations instead of its intended purpose.
Any employee, sufficiently deranged to want to continue employment at the Times, should require an examination of its books. Hell—subscribers, advertisers, suppliers and any entity that has advanced money to the Times should demand to see the results of a forensic audit as well.
The Pension Benefit Guaranty Corporation, a federal agency, has placed liens totaling $70 million against The Times Publishing Company. The Times’ total indebtedness is believed to be in excess of $100 million.
The PBGC obtains revenue from four sources:
- Insurance premiums paid by sponsors of defined benefit pension plans;
- Assets held by the pension plans it takes over;
- Recoveries of unfunded pension liabilities from plan sponsors’ bankruptcy estates; and
- Investment income.
PBGC liens against the Times (only opens in Google Chrome):
On June 28, 2017, Crystal Financial signed a Satisfaction of Mortgage, releasing Poynter Institute from a 2013 loan totaling $28 million. The mortgage security released was the Poynter Institute property and the parcels of land comprising the Times printing plant.
On the same day, Encina Business Credit LLC signed a lien subordination agreement with PBGC on Encina’s $20 million loan. The agreement identifies that as of January 15, 2017, the Times has an outstanding lien from PBGC for $59,615,990.
The subordination agreement was written so as to basically replace the same subordinated lien that Crystal had with the Times. Encina is a lender of last resort, one step above Tony Soprano’s loan sharking operation.
The subterfuge, paper shuffling, and co-mingling of funds are mind boggling.
In a “distress termination,” where the plan does not have sufficient money to pay all benefits, the employer must prove severe financial distress, e.g., the likelihood that continuing the plan would force the company to shut down. PBGC would pay guaranteed benefits, usually covering a large part of total earned benefits, and make strong efforts to recover funds from the employer.
Greasing the skids for the Times was its purchase of the Tampa Tribune from Revolution Capital Group for a reported $22 million, about $22 million too much. With property, buildings, and a printing plant divested, the Times basically purchased a name, some temporarily inherited advertisers, a subscription list, and a shabby web presence.
The machinations of the Times and Tash are eerily reminiscent of events leading up to the 2009 bankruptcy filing of the Journal Register Company. It operated the flagship New Haven Register in Connecticut as well as smaller papers in four other states.
A top executive declared the company would “emerge stronger and more viable” from the bankruptcy but three years later the papers folded.
A 2012 New York Times article recounts the duplicity of John Paton, chief executive of the management company Digital First Media Group, parent of the Journal Register group. The syndicate was run into the ground and it was perceived Paton filed bankruptcy to shift the pension burden to PBGC.
Paton was quoted as saying pension benefits should be covered by the federal agency. He said he was “embarrassed” as if that mitigated him taking a bloated salary, lying to his employees and suppliers, and putting pensioners in limbo.
Sound familiar? Tash has been insisting publicly that the Times is profitable. He said this after accepting close to $15 million from influential local businessmen who, since the stopgap bailout, have been elevated to godlike status in the paper’s so-called “news” pages and columns.
One investor, Kiran Patel, was the Times “Floridian of the Year” in 2017. Out of 20 million residents, Patel, was deemed to be the shining star. But in May of last year, two of his businesses paid more than $30 million in a settlement with the federal government after accusations of artificially inflating costs for health care. No admission of wrongdoing was part of the settlement.
Another investor, Jeff Vinik, has really gotten his money’s worth. In past trouble with the Securities and Exchange Commission on both ethical and legal grounds, Vinik tried to bleed taxpayers on a shady Museum of Science and Industry relocation.
His ineptly named downtown project, “Water Street Tampa,” is in serious trouble. Insiders say it will be ten years before it reaches fruition, if at all. But as far as the Times is concerned, the $200 million and counting in taxpayer funding to support Vinik’s “vision” is money well spent.
Steve Yzerman, general managet of Vinik’s NHL Tampa Bay Lightning never makes a wrong move, according to the Times. But he has been GM for eight seasons without a Stanley Cup. Former GM Jay Feaster, who served under a previous owner, was GM for 2 1/2 years when the Lightning won the championship.
There’s more Vinik chicanery but adverse news regarding him in the Times is verboten.
Tampa Bay residents, who are savvy enough to glean information from alternative news sources, know better. Meanwhile, the Times continues to be nothing more than a mouthpiece for its investors and vested Poynter Foundation board members. Even the “Politifact” feature is slanted and inaccurate.
The recent plethora of Times/Poynter misadventures are codified here.
Former staff writers collecting a pension might start researching freelance opportunities. Although pensioners would stand at the head of the line, a bankruptcy would interrupt pension payments. It’s extremely questionable whether or not a sale of assets would make the retirees whole.
Current employees should have been bailing for at least a couple of years as the paper has been publicly stripped of any vestige of ethical standards. It also is difficult to fathom that anyone, paid to investigate and gather news, failed to sniff out this debacle occurring in their very own workplace.
Advertisers, subscribers, suppliers, and anyone else advancing cash or goods to the Times should be squirming. When the hammer falls, it will be 20 cents on the dollar in a rosy scenario and that group will comprise the caboose.
The Times two months ago announced it would slash printing of its totally superfluous *tbt tabloid from every weekday to once a week. Tash blamed the action on the institution of newsprint tariffs by President Trump. Ludicrous.
Meanwhile Tash has been living like a Russian oligarch. In recent years, Tash sold his posh $1.6 million, Snell Isle waterfront digs and acquired even more lavish quarters, a $1.8 million condo at Vinoy Place in downtown St. Petersburg. In late 2016, he reportedly sold that condo for $2.15 million, and is now renting a comparable crib on Beach Drive in St. Pete.
Records on file with the Pinellas County Tax Collector have been changed, no longer reflecting the name of Paul Tash when a search is conducted.
Tash continues his profiteering while drawing an immense salary and driving the company’s debt to the stratosphere through artifice and gross mismanagement.
(Tampa Bay Beat will have follow-up stories on the Poynter/Times slide into bankruptcy)