Strib Bankruptcy Watch: Land ho!

The Strib has sprung a leak. A story in today's Pioneer Press reveals that the St. Paul rival obtained an "offering memo" indicating that bids on the newspaper's downtown office space are due today. The story says the land could fetch "$4 million to $5 million an acre today, or up to $60 million," but that might be overly optimistic considering the soft real estate market and the not-prime-downtown location of the land. It remains to be seen whether the Vikings will make a play for it, but Lester Bagley, the team's veep for public affairs, recently told Jonathan Kaminsky, "We believe that the property will be part of an eventual stadium development package or project regardless of who owns it."

Buried a bit deeper in the story is a window into the dire financial situation at the Strib. Citing an "Avista marketing document," the Pi-Press reveals why Avista may be looking to bail out of the Minnesota newspaper market:

The Star Tribune was the worst performer in Avista's portfolio, according to an Avista marketing document obtained by the Pioneer Press, which says the team behind Avista has a track record of generating "realized proceeds" of 2.7 times the capital invested.

Revenue at the Star Tribune declined 14 percent from $356 million at the time of Avista's purchase to $306 million in 2007, and "relevant EBITDA" (earnings before interest, taxes, depreciation and amortization) also slid 14 percent, to $70 million, according to the marketing document. EBITDA is considered an indicator of a company's cash flow.

Key words: Worst performer. Avista is not a newspaper company--it has holdings in healthcare and other industries. If it can find a way to get out from under the Strib and park the investment in a more lucrative concern, it'll do so in a New York minute.